Charitably Inclined? Keep this in mind

There are many ways to give to charity, and perhaps the most basic is writing a check. Americans can be incredibly generous in their giving, and nearly three quarters of us give to charity every year. We each have our own reasons to give, and I would argue that the main motivator is not the tax break.

There are more than 1.4 million charities in the United States, but we typically have one charity that sits closest to our heart. For me, it’s the Ronald McDonald House of Cincinnati. The Asset Advisory Group sponsors a room in the house and I consider myself a cheerleader of the wonderful things that happen there. The house is something to be seen – it’s just magical.

This post is not to petition for donations for the house, however that wouldn't be such a bad consequence. Instead, I want to point out two things that you should keep in mind when you are giving to charity, whichever one it is:

· Focus your giving
Charities spend a lot of money trying to find new donors. It is much more cost-effective for a charity to receive from a donor who is already in their database. The Cincinnati Ronald McDonald House spent nearly $350,000 on fundraising in 2007. While that spending generated over 3 million in support, every dollar that a charity doesn’t have to spend trying to find new donors helps. Your money can do more good by being focused on just a few repeat charities every year instead of sending out small donations to many organizations.

· If your gift is a one-time thing, say so
Again, this has to do with cost. If you write a $100 check to a charity and you are confident that you will not donate to the same organization in the future, ask them to not add your name to their database. You’re actually doing them a favor, because in the years that follow your donation, they will end up spending more than the $100 that you gave trying to elicit future donations from you. Don’t feel like you’re being rude, either; it’s the right thing to do.

By Amanda Bashore, CFP(r)
arbashore@taaginc.com