All about the challenges of Midlife Finance

Giving Wisely

This time of year, many people start thinking more seriously about donating — partly because they’re needed (think the recent destruction, thanks to Typhoon Haiyan in the Philippines), but also because donations can have a tax advantage.

giving wisely

      If your life has been blessed this year, why not give some of it back? Thousands of causes and catastrophes could use your help financially. But you worked hard for that money, and don’t want to waste it. Who’s the best choice to use those funds responsibly?

     One consistent watchdog for organizations is Charity Navigators, a nonprofit who monitors other nonprofits’ spending, employee lists (including salaries and perks), and fundraising activities. Their ‘top ten’ (not to mention ‘bottom ten’) lists make for interesting reading, including those who overpay their for-profit fundraisers; charities in deep financial trouble; and those who have consistently earned four-star ratings. (One of the four-star winners isCompassion International, an adopt-an-international-kid program we’ve believed and invested in for more than a decade.)

     Other good research spots are Charity Watch and GuideStar. (Go here for more on these groups, as well as helpful tips.)

     Don’t just think money, either. There are plenty of ways closer to home to give a little help to people who need it. High on the list:

     *Volunteerbut do it regularly. Give some hours to sort clothes at your local thrift shop, read to kids at the library or elementary school, or serve meals at a senior center. Doing something like this once is helpful. Doing it consistently lets groups count on you — and keeps them in your regular thoughts.

     *Not using something that’s still useful? Give it away. Appliances, clothing , books, furniture, etc. can do others a world of good, while decluttering your personal space. (Just don’t get too enthused about it — Hillary Clinton’s used underwear are still a weird chapter in donation history.) Make sure these items are still in good condition — no one wants your broken refrigerator or stained tennis shoes any more than you do.

     *Your donations may pay off in tax relief. If the group’s a certified nonprofit, they’re tax-deductible. This not only applies to household goods, but cars, trucks and even RVs. Mileage and other expenses while volunteering are also tax-deductible. They may not add up to big bucks, but they will help ease the tax sting somewhat.

     *Make it personal. Take some time to get to know those you work with. Ask questions: people love to talk about themselves. Stop by (not on your regular time) to visit a senior, or send a card on birthdays or holidays. The friendships you cultivate this way may actually be more rewarding for you than the people you started out to help.

     *Be careful. Be smart about where you go alone, or who you allow into your home. Often it’s wiser to meet some in public for coffee or lunch. (Bring a discerning friend with youor limit your interaction to the original setting, if you’re not sure.) While you’re asking questions, listen — scammers or serial moochers will often betray themselves by blaming everyone else, giving evasive answers, or pushing too hard for immediate intimacy. (After all, the faster they can drain you dry, the quicker they’ll be able to move on to someone else.)

     *When you do give funds, make them specific –and useful. The struggling single mother would be delighted with a gift card to a grocery store, so she can pick out the food her family needs most. (This also solves the problem of giving to people with allergies, especially those on gluten-free diets.) What do they need the most? If they’re struggling with health issues, make a payment on account to their doctor or hospital. If it’s transportation, chip in for a bus pass, or gas card. This way, you know exactly where your money will be going.

  *Do some of your good in secret. Send flowers or a gift card quietly, “from someone who believes in you.” Not only does this encourage your recipient, but doing it anonymously is a great pleasure. (It also reinforces that you’re giving for the right reason — not just to get something back.)

     *Give because you want to — when you want to do it. Phone calls are often from for-profit fundraisers, who will be getting a big chunk of that money you just pledged. “Hurry-up-and-give” drives may not always benefit those you intended: much of the money the American Red Cross raised for various hurricane crises, including Katrina victims, never made it to the communities at all. Instead, like the billion or so dollars collected in the aftermath of 9/11, the money was slow to be distributed, if at all. Or it just went for other things, like offices and salaries. (One of their presidents repeatedly explained that the funds “were never only for the victims.”)

     Why is it important to go through all hassle of research and care, just to give money, time, and energy to a cause you believe in? Because in today’s Internet-savvy world, it is all too easy to respond wholeheartedly, before you stop and think.

      Take the recent case of Linda Tirado, who wrote a heart-wrenching essay on poverty: living in a sleazy hotel and existing on cheap burritos; working two jobs while going to school; and making poor decisions (including wasting money, continuing to smoke and getting little sleep) because she had no other choice — poor people just had to do these things to keep themselves going.

     Tirado’s essay quickly went viral, and was picked up by all sorts of media, including the Huffington Post. She then put up a gofundme page; by the time she closed it a month later, concerned readers, many urging her to get some rest, had given nearly $62,000.

     The only problem: Tirado’s story was a fake. In truth, she is a well-paid Democratic activist who has managed several campaigns, as well as a writer. (“And night cook,” she insists.)  She grew up in comfortable circumstances, including private school; owns her own home; and her family’s income is anything but modest.

     So what does she plan to do with the money? Let’s put it this way — she won’t be giving it back. (“I am always surprised at the amount of people who are surprised by my reality,” she says.) Some surgery (what kind, she coyly evades), a nice vacation, and leisure time to write a book — on what she thinks it’s like to be poor  

     With care and discretion, you can give much more wisely.

photo credit: flickr simcsea

2 Responses to Giving Wisely

  1. Ugh I heard about that story, I can’t believe someone would do that and not give the money back. Though I would never give money to a total stranger online, even if they had a heartwrenching story. When I give back I try to always find a way to see where my money is going first.

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