Creating a Charitable Giving Strategy

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By Sten Carlson

For many of us, the New Year signifies a fresh chance to align our spending with our priorities. If charitable giving is an important part of your budget, now is a good time to take a step back and reevaluate your giving strategy. There are a myriad of causes and organizations you can support, which can leave even the best-intentioned philanthropist confused and overwhelmed. The following steps can help ensure your money is being used effectively and efficiently by the organizations you choose to support.

Step 1: Clarify your own values and preferences. Before you reach for your checkbook, ask yourself a few questions. What causes are important to you? Is there a particular demographic or group of people you would like to support? Would you prefer to give to a local, regional, national or global organization? As a donor, what do you hope to see in the organization’s leadership or structure? The answers to these questions can help you make a list of charities that will allow you to align your financial resources with your personal values – making your donation even more meaningful.
Step 2: Consider each organization’s mission. Once you have determined which organizations meet your criteria, research each charity to make sure their programs, mission and goals match your expectations. Consider meeting with an executive or local leader to hear about the charity’s strategy and their impact on the community first-hand. During the meeting, ask about the organization’s short- and long-term goals as well as how they measure success. You want to be sure that the charity is making progress toward achieving its goals.

Step 3: Investigate each charitable organization’s financial health. Look into how each donation is used and what percentage of the money goes directly to the cause. Fundraising and administrative expenses help the charity do its work, however you should be cautious about organizations with higher overhead costs. Ask the charity for a copy of their most recent annual report and Internal Revenue Service (IRS) Form 990. These forms outline the charity’s budget allocation and financial plans, and can provide you with insight into how your money is used to make the intended impact.

If you’d like an objective perspective on a charity’s financial health, fundraising practices, day-to-day efficiency and accountability standards, look at how watch dog groups evaluate the organization. BBB Wise Giving Alliance (www.give.org), GuideStar (www.guidestar.org) and Charity Navigator (www.charitynavigator.org) are several national groups that offer unbiased evaluations.

Step 4: Make giving part of your financial plan. As you figure out your donation strategy, consider meeting with a financial planner or tax advisor who can help you select the most appropriate donation method for your financial situation. These professionals can also work with you to create a strategy for ongoing contributions or to make giving part of your legacy. Keep in mind that there may be legal or tax considerations, depending on the amount and form of your donation (i.e. check, investment donation, etc.).

By taking the time to thoroughly evaluate charitable organizations, you’ll give yourself the peace of mind that your money is being used wisely, effectively and for the purposes you intended.

Sten Carlson, MBA, CFP, CRPC, is a Financial Advisor with PacWest Wealth Partners, an Ameriprise Financial Services, Inc. Platinum Financial Services Agency in Corvallis, OR. He specializes in fee-based financial planning and asset management strategies and has been in practice for 22 years. To contact him at www.PacWestWealthPartners.com, Sten.E.Carlson@ampf.com, or by phone at 541-757-3000. He is located at 2396 NW Kings Blvd., Corvallis, OR 97330.
Ameriprise Financial created the New Retirement Mindscape 2013 City Pulse index utilizing survey responses from 10,045 U.S. adults ages 40-75. The survey was commissioned by Ameriprise Financial, Inc. and conducted online by Harris Interactive from June 6 – June 26, 2013. The national average sample and the 30 U.S. metropolitan areas were each weighted independently to best represent each area. Propensity score weighting was also used to adjust for respondents’ likelihood to be online.
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2013 Ameriprise Financial, Inc. All rights reserved. File # 737444

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