As you move through your career, you’ll likely have more room in your wallet to give back. Here’s how to prioritize causes you care about and be strategic about giving, regardless of your income.
CREATE A GIVING PLAN
The environment. Women’s issues. Children’s education. Animal welfare. There are so many causes that could benefit from your time and money that it can be overwhelming.
Begin by writing down the issues you care about most, says Andrea Pactor, interim director of the Women's Philanthropy Institute at Indiana University.
The act of making the list gives you clarity about what’s important to you and how to direct your spending or your time. (Financial planners say this is also a handy technique for prioritizing your financial goals, like saving for a down payment or getting rid of student loans, and creating a budget.)
“The next step is to do a real assessment of what you’re giving now,” Pactor says. “Is what I’m doing now aligned with my values?”
If you find yourself contributing to causes only when a friend or family member asks for help or clicking yes to Facebook pledge requests, having a giving plan can help you focus on the issues you really care about.
“The benefit of a giving plan is that it enables the person who’s been asked to say no without feeling guilty,” Pactor says.
DETERMINE YOUR DO-GOOD FUND
Financial experts say there’s no rule of thumb about how much of your income you should dedicate to charitable giving.
Religious communities that practice tithing recommend giving 10% of your income, but unless you adhere to that, there’s no “right” amount, says Christine Centeno, a certified financial planner at Simplicity Wealth Management near Richmond, Virginia.
“It all goes back to what you can afford,” she says. “Charitable gifting is important, but you have to make sure you are saving for retirement and building a cash reserve.” Centeno notes that volunteering your time or expertise can be an alternative to cash donations.
Regardless of how much you make, you can pick a percentage of your income and set it aside for giving, says Theresa Stevens, a financial coach who works with millennials at Declutter Your Money in Providence.
Stevens says starting now — with as little as 1% — instead of waiting until you reach some target number helps you build a savings habit that you can apply to other aspects of your finances.
When your income changes, revisit your giving plan to see if your priorities have changed and how much you can afford to donate, Pactor says.
Stevens recommends dividing your giving allowance into two buckets — one for causes you choose and one for spontaneous giving. “If I have 5% [set aside] for giving, I might earmark 3% for an organization I’ve chosen and 2% for Facebook fundraisers or causes that come up randomly,” she says. The key is making room in your budget for both your own charitable causes and those of others.
MAKE A MEANINGFUL IMPACT
Even if you feel like your donations are modest, you can ensure every dollar you give counts.
Both Pactor and Centeno recommend looking at websites like Charity Navigator and GuideStar, which allow you to research nonprofits, see their tax filings and identify organizations that make the most impact on your chosen cause.
Since charity begins at home, your local Community Foundation website is also a good place to start. Many have a list of vetted organizations in your community you can help.
Lastly, if your company matches your charitable donations, use that to double the amount you give to your favorite cause, Centeno says.