Creating Our First Charitable Giving Plan

Up until this year, our charitable giving has been all over the place. If we saw something we wanted to support, we’d write a check. If our workplace had some sort of matching grant or charity drive, we’d participate. I always buy whatever a kid is selling when they come door-to-door because I remember how much I hated doing that when I was younger. (Although a pet peeve of mine is getting hit up for $1 at Safeway every time I buy some milk.)

We were sitting on a plane on so-called “Cyber Monday”, and thought it would be cool instead to decide on which organizations we wanted to support. (We also spent Sunday shopping at some outlet malls.) We weren’t alone. Payment processor PayPal just reported that charitable giving was up 45 percent during Thanksgiving 2010 as compared to last year.

Choosing Where To Give

Who should you let essentially spend your hard-earned money for you? Here is a list of the best charity comparison websites out there. In their holiday giving guide, Charity Navigator suggest that you pick charities that are financially healthy, committed to accountability and transparency, and creating measurable results.

However, giving for us is still personal, so we tend to include groups that are either local or have personally affected our lives. For example, Mrs. MMB and I both received some form of scholarship from our alma maters, so we give back to them.

Spreading The Love

In the beginning, I wanted to have us pick four organizations to support, and then divide our money evenly. For example, if we were to give $2,000 then each place would get $500. However, once we got going we ended up having so many different charities we “had” to give to, so we decided to split the money in half, and then we could give how we wanted. We could each give all of it to one single charity, or split it between 20 of them. Here’s what we ended up with:

Universities (Alumni)
Local Humane Society
Local Hospital Foundation
4-H Youth Program
Microplace Microfinance*
KIPP Schools
PSI (Global health: HIV/AIDS, malaria and family planning)

*Microplace is not a non-profit, but instead a for-profit site owned by eBay that packages microloans to entrepreneurs in developing areas into interest-paying investments. All of my interest earned is reinvested, so that each year the outstanding loan balance grows. Right now, if you give a $20 investment gift to someone, you get another $20 matching gift for free. $40 impact for $20. The recipient picks where the investment goes, and when it matures they get $20 back to re-invest or keep.

Comments

  1. Have you thought about Kiva rather than Microplace? They are a non-profit microfinance company.

  2. I like Kiva too.

  3. Jon, thanks to you and mrs mmb for your benevolence. It sets a good example for us, the readers of your blog. My wife and I try to do the same. We feel blessed for what we have and try to give back when we can.

    Thank you.

  4. i dont understand the point of this i for one am not giving away any of my hard earned money

  5. I would suggest that you also consider donating money for membership dues to a 501(c)4 like the ACLU, Sierra Club or Brady Campaign (substitute whichever non-profit advocacy group is meaningful to you). I say this because I think that charities/501(c)3’s are important- but they typically don’t address the major policies or structures that create injustice, inequality, pollution, etc. They tend to focus on alleviating these problems rather than fundamentally addressing the root cause. I think this is best done through litigation and political lobbying, which charities/501(c)’s understandably cannot engage in, but 501(c)4’s can.

    I think membership dues are also much more valuable than a donation, because when these groups lobby a politician or corporation, they can point the support of their dues-paying members as a selling point. As Cesar Chavez knew, and why he made even migrant workers pay small union dues, membership-dues instill a higher level of commitment for the member and the dues keep the group accountable to its members, not a foundation or corporate funder.

    I’m currently an AmeriCorps volunteer making about $4 an hour and living near the poverty level, but I still make sure to pay my small ($25-35) membership dues. I know my money isn’t providing a major financial boost (although multiplied by 1.4 million, the amount of people in the Sierra Club, it is meaningful), but I know these groups will have more political clout and credibility with each additional dues-paying member. Anyway, I hope you consider including this option in your philanthropy.

  6. We are pretty concentrated in what we give and take a similar approach to yours. We give to our university also. I really don’t give to anyone who cold calls me because I prefer to seek out and give to charities I really agree with rather than just those who happen to acquire my telephone number. I also like to target smaller organizations with very low overhead, ideally run predominantly by volunteers, because our dollars can do the most good there. We give to PBS/NPR because I really value those as media outlets.

  7. The holiday season should be a time for giving. I’ve made it a priority to do so and I am glad you have posted this. Along with giving money to charity I also love to give to food drives and I tend to give away unused clothing as well. These are all great ways to give back during the festive season.

  8. @mike – Why not? Warren Buffett does it too. Isn’t everyone trying to copy him all the time? ;)

    But more seriously, it’s because you want to improve the world for you and everyone else. So how can I best stop the spread of HIV? How do I make kids smarter and hopeful even if their surroundings are crap? I don’t want to give out money directly, so why not give to an organization that’s really good at it.

    @Andy – I agree, all those companies that send out free address labels and such tend to (not always, but tend to) spend a disproportionate amount of money on marketing.

  9. My wife and I set a goal based on percentage of total gross income. This way, if we make more money in a given year, we try to give more (dollars) away. If our income goes up each year (which it generally does), the new goal will remind us that we should be more generous in the coming year. Eventually, we’d like to also increase the percentage we give and not just the dollar amounts.

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