5 Tips on How to Stretch Your Charitable Dollars

By Dave Carpenter, AP Personal Finance Writer

CHICAGO (AP) — As the recession lingers, strapped charitable donors are still coming to terms with their reduced ability to give.

It's been a difficult time for charities and those who support them. Charitable giving by individuals was down an inflation-adjusted 6% last year, according to the Glenview, Ill.-based Giving USA Foundation, and remains under pressure from the weak economy.

Phone queries from stressed donors wondering what to do have been frequent ever since late last year, according to the Charities Review Council, a Minnesota-based nonprofit which advises donors on how to give effectively. The callers often feel guilty about not being able to give as much as they used to, according to executive director Rich Cowles, but still want to make a difference.

The good news: There are ways to stretch charitable dollars to make sure your contributions have more impact.

Even with less money available for charity, "you can make it go further by being smart in your giving," Cowles said.

Here are five tips for how to make your charitable contributions count more despite less cash:

1. SET UP A GIVING BUDGET. Treat your philanthropy as you would your household expenses and create a budget.

Sit down with your spouse or partner, maybe even your kids, and discuss your values and what causes you want to support — political, women's, Third World, health treatment, disease research or other? Then establish a budget for the rest of 2009 and for 2010, determining how much money you want to give away overall and in each category.

The Charities Review Council recommends earmarking some for a "miscellaneous" category that would cover community needs that might arise or natural disasters bound to occur somewhere.

Choosing the organizations aligned with your values can come after you've laid this groundwork. The budget will help organize your resources and fend off less essential requests.

"So often you'll get a call or someone will come to the door and you don't want to say no," Cowles said. "This gives you a legitimate reason to do so, and to make sure your money doesn't just get frittered away. Just say 'We have a giving plan and we like what you're doing, but it just doesn't fit our plan.'"

2. EXAMINE CHARITIES CLOSELY. Do the same due diligence on your donations that you would your investments or your business. Giving extra scrutiny to the charities you write your checks to is more than merited in the era of Madoff and other scandals.

Take a look at an organization's financial data, going back as far as five years if you want to eliminate any possible doubt in your mind. See who's on the board and whether the directors are all contributors. If not, ask why; you could even make your gift contingent on that.

Pay especially close attention to the overhead. Anything above 9% to 14% is out of line and signifies that too much money goes to staff or office space and not enough to the beneficiaries, according to Stephanie Risa Stein, managing director of New York-based Philanthropic Capital Advisors LLC.

Consider going local — giving to organizations that you're personally involved with, ones that either you volunteer for or that your family has benefited from.

Vet organizations through GuideStar.org, CharityNavigator.org and the Better Business Bureau. GuideStar.org provides details about charities' finances and programming, while CharityNavigator.org rates charities and evaluates their financial health.

3. DONATE SERVICES OR VOLUNTEER. Think of non-traditional ways of giving gifts to a charity. Organizations prefer your cash but also may need assistance.

"As long as you can, please offer both," said Del Martin, chairwoman of the Giving USA Foundation. "If you don't have any discretionary money, offer to do something that would be budget-relieving."

If you own a business, donate office space for an event. If you have a cleaning firm, supply free janitorial service for a month. Provide free legal or audit services if you can. Or volunteer however possible. You might also ask the charity about non-cash gifts such as old computers or clothes.

4. FOCUS YOUR MONEY. Consolidate your contributions at a single charity rather than giving smaller amounts to multiple organizations. Even if you have less money to give, this can have more impact on one favorite recipient.

You can also make limited funds play a bigger role by pooling them with those of other contributors to back a smaller, targeted cause, perhaps through a local community foundation. Information about starting or finding such a "giving circle" is available at GivingForum.org/givingcircles.

"It's a wonderful way to not only increase giving to a cause you believe in but do it in conjunction with others," Martin said.

5. TURN DOWN THE GOODIES. Some charities offer thank-you gifts or incentives for giving certain amounts — everything from key rings and bumper stickers to calendars, books, tickets and more. Tell them "Thanks but no thanks, don't spend that additional money on me." That means all your money goes to the organization, none for swag.

"For some donors, that's the sort of thing that tips it for them to give, and that's fine," Martin said. "But if you don't need that, it does make your gift go further."

Copyright 2009 The Associated Press.  All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

If you liked this article you might like

Counterfeit Toys Are a Consumer Rip-Off -- And Health Hazard to Children

Counterfeit Toys Are a Consumer Rip-Off -- And Health Hazard to Children

Obamacare Contraception Mandate Woes Continue

Obamacare Contraception Mandate Woes Continue

Cannabis Colleges Educate Budding Ganjapreneurs

Cannabis Colleges Educate Budding Ganjapreneurs

4 Things to Avoid Before Closing on a House

4 Things to Avoid Before Closing on a House

Why 401(k) Savers Are Like Bad Boyfriends

Why 401(k) Savers Are Like Bad Boyfriends