Your Finance: strategies for effective charity

It's that time of year when lots of charities are on the corner ringing their bells and asking you to open your wallet.

Being generous is proven to make people happy. But just as you should be shrewd when shopping for yourself, it's important to take a reasoned approach to charity.

Here are several strategies for effective giving.

Listen within. In the age of social media, we're constantly being bombarded to give to this or that cause by friends, colleagues or even strangers. But the deepest satisfaction will come from choosing causes that align with your values, hopes and perhaps wishes for the new year.

Do your research. Check national databases. Organizations such as Guidestar and Charity Navigator offer ratings of the financial health, accountability and transparency of thousands of organizations. You may choose not to give to an organization that routinely runs a deficit or whose CEO is pulling down half a million dollars a year.

Support a mix of organizations. Research shows that most small donors support small organizations that they feel a personal affinity with, and often stick with the same groups year after year. However, we don't always have the best information about which organizations are effective. And the effectiveness of organizations can change over time.

Give deliberately. A co-worker is doing a "fun run" for some group you've never heard of. There's a donation bucket at the checkout line. Or, hardest of all, someone is panhandling in the street. In all of these cases, you don't know much about where your money is really going to go. Also, you're unlikely to keep a record of such incidental donations. That's why it's better to do research and make an affirmative decision about where and how much to give.

Spread giving out over the year. Monthly donations help charities plan.

Give as a gift. Want to get your holiday gift-buying over in half an hour? Make a series of donations. Bonus if you have a creative way to let them know. One year my mother donated on behalf of the extended family to Heifer International, a community development organization that provides productive livestock to people in villages around the world. The aunts, uncles and cousins got a small stuffed sheep or goat in honor of the contribution.

Take your tax benefit. In order to get the tax write-off for charitable giving, it will be necessary to itemize your deductions on Schedule A of Form 1040. You must keep written records (the phone bill works in the case of a text donation). And don't forget to keep records of in-kind donations and volunteer hours as well.