Make Your Charitable Giving Count: 7 Tips

A recent survey by Fidelity Charitable indicates that many donors have the same questions about making their giving more effective. In fact, two-thirds of those surveyed said that while they’d like to give more, they are concerned by factors that make it more difficult for them to give as much as they’d really like to.

That’s not to say that charitable giving is in trouble; at least, the statistics don’t point that direction. Individuals gave almost $485 billion in 2021 (the last year for which all figures are available), which represented a 4% increase over 2020 in the dollar amount given (though the higher inflation in 2021 took a bite out this total). This is significant, because giving by individuals makes up by far the largest proportion of the total, at 67%, followed by foundations at 19%.

But for donors who want to do even more, questions remain. Some are concerned with the level and quality of communication they receive from nonprofits; others are conflicted over how to prioritize or respond efficiently to the many requests they receive; still others worry about how to track and organize their charitable efforts.

Here are some ideas on how to make your giving more effective and more reflective of what is most important to you.

  1. Write your charitable giving mission statement. The Fidelity Charitable survey indicated that 53% of respondents felt “bombarded” with requests from charities. Additionally, 45% reported feeling burdened by requests from friends and family members, soliciting for their favorite causes. One way to gain clarity about the choices you make with your charitable giving is to create a mission statement for your giving that focuses on the causes and initiatives you care most about. Having such a statement can also make it easier to decline requests that don’t closely align with your most important priorities.
  1. Give appreciated assets, not just cash. While it’s impossible to predict what the markets will do in any given year, some observers believe that gifting assets, as opposed to cash, is likely to see a resurgence in 2023, as markets recover from the doldrums of 2022. Giving appreciated assets can also be helpful to the donor by reducing the capital gains tax bill. Donor-advised funds (DAFs) are finding favor with many who want to simplify and streamline the process of gifting assets to charity while also retaining some control over which charities benefit from the gifted assets.
  1. Understand your charity. Two-thirds of respondents to the Fidelity Charitable survey said they had uncertainty about how a charity was using their money or whether the charity was operating effectively. Fortunately, third-party resources like GuideStar and Charity Navigator gather and publish data on charities that make it easier for interested donors to know how charities rank in terms of financial efficiency and mission effectiveness. You can also contact the charity directly and request information such as what their greatest needs are, how donations are used, and other questions.
  1. Make philanthropy a family affair. Children as young as four can begin to learn about sharing with others, and you can get ideas for age-appropriate activities for kids of all ages at sites like ProjectGivingKinds.org and others. By building the principles of philanthropy into your family, you can lay the foundation for a family legacy that lasts for generations.

At Empyrion Wealth Management­–Mercer Advisors, we provide fiduciary, professional guidance for those who want to make the most of their charitable giving legacy. To learn more, click here to read our article, “Maximizing the Impact of Your Family Legacy: Helping the Next Generation Inherit a Philanthropic Mindset.”

Stay Diversified, Stay YOUR Course!