How to Budget Charitable Giving

Donating to charity is not easy when finances already feel tight. Between medical expenses, college loans, car payments and rent, it can be hard to find room to give no matter how much you want to contribute to a good cause. But with the following tips, you can still help those in need even while on a tight budget. 

Pick a cause you find important

Before you decide to budget for charitable giving, you should pick a cause you feel truly passionate about. Tyler Dolan, a financial planner for the Society of Grownups, says that if you’re going to be making a sacrifice, it’s critical that you believe in the cause. “Contributing to a cause that resonates with your values is better than donating to everything that comes across your email or Facebook feed, because it will mean more to you,” he told The Huffington Post. If you pledge to give to a charity you find important, you’ll be more likely to stick to your commitment and feel good about it.

Set up a labeled savings account

Budgeting for charitable giving can be exactly like putting money aside in your savings account — though putting money aside for yourself should come first, or you’ll risk being just one emergency bill away from being the one in need of charity. Priya Malani, founder of Stash Wealth, a company that helps young people manage their money, says that she sets up labeled savings accounts for her clients who wish to start giving. “People say, ‘Should I or shouldn’t I donate?’ But if the money’s already there, you’re going to do it,” she explains. The key is to name the account appropriately, like “Donations.” This will discourage you from drawing funds from the account for other purposes.

Start small

It’s better to give very little than to give nothing. Charities will be grateful to accept a $10 monthly donation even if you wish you could afford to give more. Setting up automated monthly payments also has the benefit of giving the charity predictable support while helping you better assess your own budget. If, after accounting for expenses and your own savings, you can afford to give no more than 10 percent of your income, then give 10 percent and let the amount that represents grow naturally as your income also grows over time.

Furthermore, donating has a positive impact regardless of the dollar amount you contribute. “We see value not just in the donation itself, but also the relationships that we build with our donors over time,” says Paul Olson, a spokesman for The Task Force for Global Health. “They often become our best advocates and help raise awareness about the importance of the work that we’re doing.”

Donate used items

One way to give without drawing from your income is to donate used items. Take a look around your home and see what you can do without. Sometimes, simply cleaning your attic or your closet can reveal a number of items that you forgot existed, no longer use and could give to someone in need. You can donate toys, clothing, household appliances, furniture and more at the Salvation Army and Goodwill, but your options aren’t limited to just those places. “Women’s shelters always need donations of clothing and personal hygiene items,” Rebecca Lake writes in a September 2012 article for Money Crashers. “Books and magazines can be donated to your local library or neighborhood school.”

Volunteer your time

If you are truly strapped for cash but still want to give, you may want to consider volunteering your time instead. “Many organizations need a constant and steady supply of volunteers to fulfill their mission,” Camilo Maldonado writes in a July 2018 article for Forbes. Opportunities to volunteer locally are everywhere and include schools, hospitals, food pantries, senior centers and libraries. Dedicated websites like VolunteerMatch can even help you find places to volunteer in your area.

Even with modest means, it’s still possible to give to charity without compromising your own life and savings account. Ultimately, it comes down to a matter of priority. Can you cut a coffee or two from your monthly expenses? If so, you may find that putting that money toward charity instead can quickly become a very natural and rewarding habit.