The end of the year is approaching fast. I can already see it coming now, with holiday events, programs, travel plans, deadlines, etc. It can seem like a freight train with no sign of stopping. With the endless list of demands, it can seem like we are in a war deciding on how to triage the situation. I am reminded by the scene from the war movie Hacksaw Ridge when a more tenured soldier explains the hard but necessary truth of triage to a new recruit.
I digress. Although the freight train is coming, we can decide ahead of time how we can properly prioritize the most important things that we both want and need to accomplish with our finances. One of the items in our budget that is often neglected is charitable giving. While it can be easy to brush off this budget item from our priority list, it can have valuable benefits financially and non-financially if done properly. In this post, let’s dive into why it should become a priority in your year-end financial planning.
Benefits of Charitable Giving
First of all, let’s review some of the benefits of charitable giving.
We know that there are tax benefits of charitable giving, but one of my favorite ways to give charitably is when you can incorporate into your budget in a manner that doesn’t affect your budget, but lets you give a larger after-tax amount. If you are interested in learning more about how to optimize your after-tax gifts, check out our webinar next week on 3 Tax-Efficient Strategies for Charitable Giving.
A non-financial benefit to charitable giving is gained by following the spiritual guideline that we are called to abide by. In the church, we are instructed to bring our tithe into the storehouse. By acting in obedience to God’s Word, we open ourselves up to the blessings He has for us that we can’t count with our earthly systems. The Bible says the “Windows of Heaven” would be opened up for our benefit. We naturally think to earthly possessions as the manifestation of this blessing, but I truly think there is even more to it than that, potentially even heavenly blessings awaiting us that we can’t comprehend in our present life.
Supporting causes that further spreading good to others is another benefit to charitable giving. Non-profits frequently run on shoestring budgets, with volunteers and employees contributing out of their personal time and resources, because of their passion for their work. We underestimate the value of the impact our giving dollars can make for these organizations.
As we look to how to practically align our budget with our charitable giving goals, the following 5-step framework will help you begin to make year-end giving a reality.
Decide Where You’re Giving
It’s no question that giving to local clauses will provide you with the most sense of impact. Whether it’s your local church, charity, or other non-profit, there is no replacement for being able to actually see your giving dollars at work. These causes are likely the dearest to your heart and most likely to impact the community and people you care most about.
Decide How Much You’re Giving
Just like a larger household budget, your giving should have its own separate budget that you have determined to be feasible for your current level of income and expenses. If you’ve never set up a budget before, check out our previous post: Revamp Your Finances: Strategies for Effective Budgeting in 2025.
As I mentioned in my intro, there can be many ways to achieve a higher level of giving but still have the same after-tax income. This is accomplished with the various tax deductions and savings that the IRS allows for charitable contributions. Working with a qualified financial planner or tax professional can help you take full advantage of these allowances.
Small is Better than Nothing
One of the foundational truths in achieving financial success is making good, small steps over time. The same principle applies to giving. If you can’t give your whole goal at once, splitting it up over time is the next best option. Many charities and non-profits have recurring giving programs set up and can help to keep you motivated to give, even if it seems like it’s just a small amount. These small gifts add up over time and can eventually help you develop habits that enable you to give larger amounts once you’ve got used to the ongoing practice of giving.
Don’t Keep the Money in Your Checking Account
Let’s face it. The money you have in your checking account during the holiday season will be burning a proverbial hole in your pocket. From Black Friday deals to the end of year sale on your much needed vacation, the money in your checking account is at high risk of being spent. Take the time to open up a separate savings account just for the purpose of giving – hard stop. This will protect your charitable wishes from being stolen away by other impulse desires.
- Pro tip #1: set up your savings account at a separate institution from your other accounts. This keeps it out of the path of your normal routine.
- Pro tip #2: add a nickname – ie. “giving” or “charitable” to keep yourself accountable to the purpose for the funds. You may not realize it, but this has more psychological power than you think!
Look Beyond just Cash
Giving goes beyond just money. Although cash can be a great gift to give, it’s not the only way to give. Giving of old household items, equipment, furniture etc. can be turned into cash through many different organizations. Checking with the organization you support is the best way to determine their most preferred donation methods. Volunteering of time or other expertise is also a valuable way to give back. Providing skilled labor, industry knowledge, or simply helping with facility maintenance are all ways to give in a meaningful way.
Get Started Now
The journey of a thousand steps begins with one! Commit today to making giving a part of your budget. If you are curious about our approach charitable giving, schedule a call with us today to see how we can be your guide.
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