How to do the most good without disrupting your Financial Plan
13 December 18  /  Insights

Many studies have shown that charitable giving provides greater happiness than buying more stuff. Eventually, you get used to your fancy new car or watch or whatever it may be, and the enjoyment it provides vanishes just as quickly.

But giving forges feelings of connectedness and community that doesn’t fade away. It gives you that warm, fuzzy feeling inside, knowing you have done some good.



Incorporating charitable giving into your financial plan is a great way to make sure that your generosity is aligned with the things that are most important to you. Some forethought about these key issues will also make sure that your good intentions do not throw off the rest of your long-term financial planning.



Before you decide to give, we have comprised a list of useful tips to get you started.



1.  Have a purpose



The most effective charitable giving is thoughtful and intentional. It may be helpful for you to ask yourself some questions that will narrow your focus, such as:



  • Do we want to give to a national or local cause?
  • Are there any pressing issues in our community that we feel we can help impact?
  • Do we have any personal connections to causes, such as medical research, supporting a university or for the arts?
  • Do we want to support friends or family by contributing to causes that impact their lives?
  • Do we want to support a religious organisation, such as our church?

  • Are our charitable impulses motivated by on-going problems, such as poor education or homelessness, or would we rather position ourselves to react to events such as natural disasters?


2.  Do your research



Once you’ve settled on a cause, do some research on potential recipients. Visit the local nonprofit you’d like to support and meet with its leadership team. Is the organisation running itself responsibly? Are there good, competent people in charge? Will these people get the job done? Don’t sink your money into a well-intentioned black hole. You want to make a difference after all.



If you’re looking to give to a national organisation, keep in mind that even some of the biggest names have come under fire from watchdog groups for misusing donations. Make sure you’re giving to an organisation that’s doing what it says it’s doing to do with your money.



Also, remember that big organisations – even non-profits – have to manage things like overheads, salaries, and insurance. Are you happy supporting the organisation itself? If you want to see your money in action more visibly, you might be happier giving locally.



3.  Be aware of the internet



Whenever something bad happens in the world, our inboxes and social media are flooded with donation links. Read before you click. Be especially wary of crowd-funded campaigns on sites like GoFundMe. The cause may sound worthy, but these sites do not provide meaningful oversight on every campaign.
Your money could be going to a cause, or it could be going straight into a scam artist’s pocket. You’ll never know for sure unless you know the person organising the campaign.



4.  Ask yourself what will do the most good



There’s more than one way to give. Maybe the local adult literacy centre needs volunteer tutors as much as it needs money. Perhaps you’d feel more fulfilled helping out at your church’s food bank than you would feel by writing a check. Taking a more active role in a cause that’s important to you might be the most valuable thing you can give.
However, if you want to help with large-scale problems outside your own community or even country, money is usually the most effective way to contribute. Unlike toiletries or canned goods, money doesn’t have to be boxed and shipped. You’re better off contributing to large, trustworthy organisations that already have systems and pipelines in place.



5.  Know your own spending limits



Especially as you near retirement age, your giving should be a planned part of your budget. Don’t make a large one-time contribution that’s going to force you to dip into an emergency savings fund. Don’t sign up for a recurring gift that is going to put a strain on you each month. If you can’t give as much money to a cause as you’d like, think about supplementing a smaller contribution with regular volunteering or think about other ways to help.
 Sometimes our best intentions get us into the most trouble. It’s great that you want to use your money to try to make the world a better place. But sustaining your comfort and happiness are important too. After all, you worked very hard to accumulate your wealth over the years. 



When in doubt, let your core values be your guide. Apply the same principle to your giving as you do to the rest of your life-centered financial plan: use the money you have to get the best life possible. With a little planning, you’ll make life better for those around you as well.



As Lifestyle Financial Planners, we can incorporate just about anything into your personal Financial Plan. We can generate ‘what if’ scenarios, showing you the impact spending, such as giving to charity, will have on your finances in the long-term.

Speak to us today if you have any worries or concerns about your finances on 01865 208012 or click here to request a callback.
 

Next Article
Key times to review your finances
19 December 18  /  Insights