View Full Version : Pulling back on charitable donations
SteveinMN
6-17-13, 11:42am
I had mentioned in the June Frugals thread that DW and I are looking at our expenses again now that we've added some and reduced/eliminated others.
One that is causing a little dilemma is a monthly donation to one particular charitable organization. DW's and my mantra for giving is that we'd rather support a few needs well than to spray little bits all over. That approach has worked well for us, both in defining giving within our budget and in being able to say 'no' to other (albeit-worthy) needs which approach us.
I became involved with this organization before I met DW, though she is not opposed to the work this group does. It is a good charity, with very little money going to administration and fundraising, so I don't worry that the money we're giving them is being wasted.
I started donating to this group monthly a few years ago and added to the monthly amount over time. That amount wasn't hard to afford when there were two incomes coming in. But now we're living on less than half of what we were and we could put that money to other good uses. Some bigger expenses are coming, like a major service interval on my car, life insurance premiums for me (which will be COBRA'd until November and then almost certainly will go up), and some repairs/improvements on the house which we deferred since I left work last year.
The dilemma is that we are not living on the edge. Giving money to this organization does not mean we don't pay the electric bill. We have some money for niceties without hitting our savings. The people we are helping through this organization are not that lucky. For them it is a choice of feeding their kids or heating the house. Yet it's not like we're going to take some of this money to buy ourselves luxuries. The expenses are not extravagant and they do serve our long-term economic benefit. And as the old saying goes, charity begins at home. Yet many faiths call for a sacrificial level of spending and we're getting by while meeting the obligation. It is a good thing to do at any level.
This is not a question I would ask in any other fora, but I suspect some of you have wrestled with this. We're not asking for a decision, just reasoning for whatever decisions you've made. Maybe this is all just "white guilt", I don't know. If it is, I'm a big boy; you can say so. What sayeth the group?
Just figure what out what decision you can live with and go with that - easy to say, but it can be an incredibly difficult choice. It's one of those choices where you have to draw a line in the sand, and those are never easy. That said, it's also one you can always update if you decide the choice really didn't work for you.
I have passingly considered what the implications would be with regard to charitable donations after retirement: We deliberately consider our charitable donations in the context of a certain percentage of income. When more of our expenses are paid from savings instead of income (i.e., income then being only the taxable distributions from retirement plans), that'll naturally result in a substantial reduction in charitable giving. I think we're going to be okay with that. I see no reason why not to apply the same logic before retirement, and actually will unquestionably encounter that situation: In that interim period, when one of us has retired and the other has not, and so we're effectively living on half the income as before, then we'll be giving to charity practically half as much as we give now. Again, I believe we're going to be okay with that.
I went through this same dilemma some years ago and chose the amount of $$$ that I could contribute to a limited number of groups, some material donations to another and my time to the remaining three. That split has left me comfortable with my contribution to my community.
While we do support some organizations with financial gifts, most of my charity is in the form of my time, which in my current role as a SAHM is more abundant than money. When DH and I were both working, it was easier to donate money than time.
... I became involved with this organization before I met DW, though she is not opposed to the work this group does. It is a good charity, with very little money going to administration and fundraising, so I don't worry that the money we're giving them is being wasted. ...What sayeth the group?
Steven, why do you think it's good management if very little is spent on fund-raising & administration? How are good management, paying people a living wage, and making sure that there are more than adequate resources to meet ongoing program costs wasteful?
You have named one of the most outdated measures of non-profit success to have ever existed. It never was a good measure, and comes from a very old way of viewing non-profit work: that this work is essentially volunteer based, and because it's "good work", staff should work for next to nothing, and there should be no extra for planning, good management of resources, etc.
Just like for-profits, non-profits who pay scanty wages have very high turnover, which is hugely expensive to the business. Just like for-profits, non-profits who are unable to invest in robust fundraising struggle to have enough to pay the bills, and cannot do any kind of long term planning if they are constantly in deficit. Just like for-profits, non-profits who do not have the capacity to plan, don't plan, and severely limit their mission and impact.
A healthy non-profit should be investing at least 25% of their budget in admin & fundraising. Unfortunately, because of the absurd belief that these are "a waste", non-profits are forced to hide the actual costs in program budgets. Non-profits are also punished for having a reserve! Many donors, both individual & foundation will not give if there is a cushion of cash in savings, a rainy day fund. Insane!!
There are a myriad of ways to hide expenses so that these myths are maintained. I have created many very interestng expense budgets to do just this: hide the true cost of doing business to assuage donors who have believed this BS. I am here to disabuse you of the myths!
As better business practices have entered the non-profit sector, these myths are being turned on their heads. No successful for-profit business skimps on salaries, R&D, planning, and long term fiscal sustainability. In fact, not attending to these business basics is a great way to sink a business. Why would these then be the measure of a successful business that is a not-for-profit? They are not.
However you re-think your non-profit support, please drop the measure of how scant the money they spend on admin & fundraising is as a criteria of success. In fact, get to know the ED, and ask them this: how are you assuring that you have adequate resources to pay your people a living wage, which includes benefits, how are you able to do long term planning without worrying about the fiscal impact, and how are you assuring that you have enough of a reserve to meet your mission in the case of an emergency?
I say this: invest your donor dollars in an organization that has a mission you believe in wholeheartedly, has a reserve, a stable workforce, a Board that attends to fundraising, including 100% giving by Board members, a Board that attends to governance, a long term strategic plan especially fiscal sustainability/fundraising, and proven mission outcomes.
I agree with the other posters that it's perfectly okay to scale back given you are basically a one-income household now. We all do what we can.
Also, thanks, redfox, for the $ background on non-profits. Many years ago when I was chairing our company's United Way campaign, we had people who really bristled at paying anything towards the UW "overhead." I finally pointed out to one employee that the only way I knew of to not pay any charitable administrative costs was to walk up to a homeless person and give them a $20 bill. sheesh.
Gardenarian
6-17-13, 7:48pm
Great question Steve, and I have pondered this myself.
I have narrowed down the number of charities I support, so I can keep a closer eye on what they are doing. I would rather be more closely involved with a couple of groups than give $10 here and there.
The other thing we have done is to donate time instead of money. We all have put in time at our local environmental non-profit (pulling invasive plants, mostly.) One thing my DD and I do is to pick up all the trash from one of the nearby trails once a week. You don't have to join an organization to help make the world a better place. Planting a tree will do more good than giving the same amount to an organization. Act locally.
As far as tithing goes, it used to be that the church would provide education, help for the poor, counseling, food when needed, and community leadership. Most of these things now come from the government, and I feel like I've done my share of tithing there. (I'm not knocking the faith-based organizations, which do a lot of good - but I'm not a member of an organized religious group.)
iris lilies
6-17-13, 8:39pm
Such a good topic. I think 10% is a good number, the traditional tithe. Gardenarian's point though is good--our taxes now take the place of traditional human social services. But tithing to the church never covered animal welfare, the Art Museum, community gardens, etc. I don't give that much but do not donate to human services, anyway. Not my bag, let Nanny G have that gig. I gave 20% of an inheritance, but that was windfall. From regular cash flow I don't tithe. It's something I think about a lot. Part of my limitation is that DH is more of a money hoarder than I am, and I am pretty bad. The cash flowing through here is half his.
We are working on a will and I will throw out our wealth to charity, more so than to relatives. DH wants to leave it to family and that is ok, if he survives me which he likely will, it's his money at that point.
Steve, I do have to mention -- life insurance? You have life insurance? It's none of my business, but we don't have life insurance (well, I have a free, small policy at work) but we figure that our spouse is perfectly capable of taking care of himself/herself.
Here's a related question: how do ya'll feel about donating to tax supported institutions? Let's leave out PBS/NPR for the moment. What about school fundraisers? Foundations for the county art museums? Are you Friends in these organizations and/or even more of a donor?
rodeosweetheart
6-17-13, 8:54pm
We have been tithing for a few years now, now that we are out of debt. We tithe on the money that flows in, not on the gross income. Lately, have not been going to church much, and have been sending the money where it feels we have a leading to send it. But have been more localized, I guess, and more in line with personal values. So of the money I earn at the community college, I send 10% to the foundation there for textbooks for my students. I also send money to the college where I got my second degree later in life, because they need it, and I send money to other college funds sometimes. But I know the money I send to my local community college helps my students with very real needs, and helps empower them to change their lives.
When you link it to what is coming in, then it helps a lot, as it is a preset percentage, and it goes out first, and we budget on what is left over.
I would not be giving the same amount as when our salaries were double, if that is your question.
I figure when we are retired, then we will be taking some amount out of savings or getting SS each month, and whatever that number is, we can still keep tithing on that. And still keep saving--we do that by percentage, too.
But I never arrange to give a certain amount each month via pledging--because we do the tithe, and do not know what tomorrow may bring.
iris lilies
6-17-13, 8:58pm
...
But I never arrange to give a certain amount each month via pledging--because we do the tithe, and do not know what tomorrow may bring.
That is very cool, good for you!
I used to support Special Olympics, Salvation Army and Habitat For Humanity. Now that I am retired, I volunteer three days each week and give money only locally, as in my city. I support two services, both private, that in turn support homelessness, addiction and mental health. Vastly simpler, and no fussing with my budget to know what I can afford. I give what I can, when I can.
iris lilies
6-17-13, 9:07pm
Steven, why do you think it's good management if very little is spent on fund-raising & administration? How are good management, paying people a living wage, and making sure that there are more than adequate resources to meet ongoing program costs wasteful?..
I watched a local animal welfare organization start here with nothing, and I mean nothing, to grow to be one of size in my region. This is the internet where nothing is private so I won't be specific, but let me tell you that money corrupts. And it is downright creepy how the Founder inspires a cult-like following. Ugh.
But I can skip over all of that and just say: I won't give any longer to that org because I disagree with their programs, I can say that on the web. Why bring in dogs from outside of the state when the start start up mission was to save street dogs here. And--buy a country cabin for foster and day-fostering people to use with dogs, I mean Reaaaaaaaaaally? Who is really goning to be using that place?
What is lacking here is a strong Board, most likely, as well as it having rapid growth and too damned much money.It's not the salary of the founder and staff that is a problem with me.
What is lacking here is a strong Board, most likely, as well as it having rapid growth and too damned much money.It's not the salary of the founder and staff that is a problem with me.
Word! Good for you for withdrawing support. I get telefunded by a local women's health org that has had a dreadfully bad turnover in ED's. Bless the poor telefunder who calls me, a career fundraiser. I told the last caller for this org that until I saw 5 years of stable leadership at both the Board & ED level, to not expect any support & not to call back, unless it was a Board member calling to explain things to me. I asked her to please take notes & share my thoughts verbatim with the org. I hope she did!
Donors have power & a voice. Use it!
A recent TED on this very topic...
http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dea d_wrong.html
SteveinMN
6-18-13, 11:29am
Wow! Thanks for all the responses, everyone!
I had not considered using time as a donation to this organization. Which is odd, because that's how I got involved with them in the first place (an afternoon here, an afternoon there...). I certainly could do that in lieu of $$. Excellent point...
Steven, why do you think it's good management if very little is spent on fund-raising & administration? How are good management, paying people a living wage, and making sure that there are more than adequate resources to meet ongoing program costs wasteful?
redfox, I should clarify. I have no problem with paying people what their work is worth on the market; I have no problem with a foundation amassing capital for longer-term needs (like additional space to offer services, branch offices, etc.). That money takes what it takes.
When I say an organization is managed well, I mean that they are doing the work without wasting money that donors are led to believe they are giving to the needy. Komen is an excellent example of how not to do it; many people will cite United Way, too. Lavish compensation for executive officers, lots of money spent on promotion and marketing at the expense of their core service, etc. I've seen this organization's corporate office space and it does not resemble an investment bank's; it looks like everyone else's. Some of the people I've worked with in that organization -- even at the lowest levels -- have been there for years, so I think they're being treated decently-to-well. I agree that an organization which can't make it without free help is not in good shape. This is not one of those organizations.
Steve, I do have to mention -- life insurance? You have life insurance? It's none of my business, but we don't have life insurance (well, I have a free, small policy at work) but we figure that our spouse is perfectly capable of taking care of himself/herself.
Both of us have life insurance, yes. Right now it exists mostly to give DW peace of mind. If one of us goes before the other, she wants the mortgage taken care of so the remaining partner can make some decisions without a house hanging around his/her neck. I understand that our deferred-comp, pensions, and annuities -- all available to the remaining partner -- should take care of mortgage payments and house expenses, but DW isn't quite there yet. I also have to be aware of the fact that, at 50+ and out of IT for a couple of years, it won't be easy for me anymore to land a good job in that field.
Just like some people are skittish about investing in the stock market and accept lower risk (and, usually, a lower return) elsewhere, some people don't like the idea of going without insurance... November may be a good time to reconsider that one as we look at what happens with COBRA for my policy ending.
Here's a related question: how do ya'll feel about donating to tax supported institutions? Let's leave out PBS/NPR for the moment. What about school fundraisers? Foundations for the county art museums? Are you Friends in these organizations and/or even more of a donor?
How much tax support? Is the government the sole support or one of several? The context helps me decide some. In the case of school fundraisers, I think government support/taxes should extend to a useful level of education and safety for the students and staff. I think there is value to everyone in learning languages and playing music/exploring art and in some level of organized physical activity. But if the high school football team wants a dome to practice in when they have a usable field, they're on their own. If the junior-high band wants new uniforms even though the old ones are serviceable, let them sell baked goods. Government cannot support every organization to the level their wishes.
For example, I do contribute (money and time) to a listener-supported (non-NPR) radio station run by the Minneapolis school system in one of their poorer high schools. It's vocational training, kind of the same way high schools used to teach kids to weld and sew. I also happen to like the music they play most of the time, so I'd support them even if they were not part of the school system. The school is providing an avenue for kids to learn useful life skills (speaking, music history, electronics, writing copy, the commitment of running a 7x24 radio station, etc.). But I can see that the school system should not support the station's sponsoring concerts at private venues and I can see the station running its own fundraisers for new capital wants, like a bigger transmitter or a new control board. I don't live in the Minneapolis school district, so I don't support them that way. But I do support the station beyond whatever money they may get from the state and Minneapolis.
To be fair, the United Way had a CEO many years ago who was spending lavishly. He was tossed out and a new CEO put in, with a stronger Board.
I would not characterize the UW today as an organization with heavy or wasteful administrative costs, and I continue to support the local UW with a small monthly amount from my paycheck.
Although in the past I have tried percentage giving, what works for me right now is a fixed amount which is a line item on my monthly budget. I give what I can give cheerfully and leave it at that. I give some time through my church to an organization that gathers and sorts donated medical supplies and sends them to clinics around the world. We have a large medical center in Houston and it is unbelievable how much medical supplies would otherwise be wasted.
I would not characterize the UW today as an organization with heavy or wasteful administrative costs, and I continue to support the local UW with a small monthly amount from my paycheck.
In 2010, I was our workgroup's coordinator for our company's UW campaign (likely the biggest charitable push the company makes each year). The sheer amount of marketing material -- T-shirts, notepads, pens, videos, etc. with the UW logo on them -- far surpassed any other organization I've worked with. It wasn't stuff that would carry over from year to year, either. Maybe UW is a big enough thing that companies are happy to comp goods and services. But I could not help thinking that there was a fair amount of waste in all of that.
I'm aware that UW is a big source of funding for many critical front-line charities. I know organizations (non-profit and for-profit) do not get to the size UW has without becoming a bit of a target. And maybe what I saw was a function of the local UW chapter and not universal. But seeing it did not make me feel terrific about the way UW was spending my donation.
I can relate to your post, Steve. DH and I are in the same position. We do tithe ten percent of our pre-tax income to our church and like to give to others beyond that. Sometimes that means we support a charitable organization; other times, it means we strive to help meet the needs of an individual or family we see struggling. We probably give about $350 a month, which is around 20% of our after-tax income.
I guess I tend to look at my life and feel we have everything we need. Could we live more comfortably if we kept that $350 instead of giving it away? Of course. But I would not feel right blowing my money on "wants" when so many other people have genuine needs. I would rather have less so others can have more. My sister once told me that she thought it was dumb that we "deprived" ourselves to "support complete strangers." But we do not feel deprived by our choice. We feel happy and blessed.
Just my 2 cents! :)
SteveinMN
6-19-13, 10:40am
I guess I tend to look at my life and feel we have everything we need. Could we live more comfortably if we kept that $350 instead of giving it away? Of course. But I would not feel right blowing my money on "wants" when so many other people have genuine needs. I would rather have less so others can have more. My sister once told me that she thought it was dumb that we "deprived" ourselves to "support complete strangers." But we do not feel deprived by our choice. We feel happy and blessed.
Very much the way I feel about it, Kat, which is why I brought up the question. We still haven't formulated our course of action; we were out of town this weekend and really didn't have much time to discuss it.
I would rather have less so others can have more. My sister once told me that she thought it was dumb that we "deprived" ourselves to "support complete strangers." But we do not feel deprived by our choice. We feel happy and blessed.
I'm sure there are people who know us who think we're bleeding-heart commies for thinking this way, too. I think it's entirely fair to give in a way that expresses one's values. But I can't think of a major religion that discourages helping those without. And it's what Love would do. So we do it. The question is, as in so many things, the balance.
sweetana3
6-19-13, 11:26am
We are retired and hubby "works" for Habitat for Humanity and SAWS. SAWS is a local group that builds ramps to free people from their homes. One woman had been homebound for years. They are small so have direct impact on the person/family they are building the ramp for. We also give money to this group and it is stretched as tight as possible. Habitat is familiar to most and we give money for specific needs and tools when they can help. Again, a direct impact on a family's life.
I give to two local animal rescue groups. One is a super low cost spay neuter clinic set up by an MD since he could not get the local groups to support the effort. (Imagine, the humane society would not support spay neuter. They built new buildings and I guess had to stay in the business of rehousing animals.) Over 10 years later FACE is still growing strong and open 6+ days a week. Full every day. They absorbed a local feral cat group which is an action I really support. Too many groups with too many layers of administration all over fighting over the donations and duplicating effort.
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I give to two local animal rescue groups. One is a super low cost spay neuter clinic set up by an MD since he could not get the local groups to support the effort. (Imagine, the humane society would not support spay neuter. They built new buildings and I guess had to stay in the business of rehousing animals.) Over 10 years later FACE is still growing strong and open 6+ days a week. Full every day. They absorbed a local feral cat group which is an action I really support. Too many groups with too many layers of administration all over fighting over the donations and duplicating effort.
It's dismaying that any humane society would refuse to support free or low-cost spay and neutering. In contrast, the Oregon Humane Society is sponsoring "Spaycation" right now--expecting to operate on upwards of 100 cats and kittens free of charge from June 17-21.
Our low cost clinic and Indyferal got a $100,000 grant from Petsmart charities and do about 5 zip codes free of charge. They are especially targeting feral cats, colony cats and pit bulls but will help anyone from those zip codes. They were able to get a van and the whole thing is an advertisement so that those who cannot get their animals in to the clinic have a way to get them there. The issue of transportation is a big one with the elderly and disabled here in Indy.
The humane society with a $3 to $4 million dollar budget has talked and talked about a spay neuter clinic and never gotten it off the ground. FACE started a low cost vaccine clinic years ago and the humane society just got that one started not too long ago. It is my personal opinion that the humane society never wanted any veterinarian to get "mad" at them. Again in my opinion, the vets all felt that spay neuter was their own personal money pit and damn those who could not afford it. Even with FACE, none of the vets have gone out of business. Note that FACE charges more for tiny dogs and less for big ones. They are trying to reduce the euthanasia rate for specific large groups of dogs and cats.
Lisa Tudor of Indyferal speaks all over the country now as a TNR advocate.
... Too many groups with too many layers of administration all over fighting over the donations and duplicating effort.
Truly! This is precisely why, whenever someone asks me how to start a non-profit, I suggest they scan the market & consider allying with an existing org first. Many existing non-profits will umbrella a start-up under their 501 C 3 if there is mission alignment. The benefits are that the start-up doesn't need to create a new org & all the attendant headaches, they can jump right into program development. The umbrella org usually gets a 10-15% admin fee to provide the admin services of bookkeeping & donations receipting. If after two years or so the new project wants to launch their own entity, they are usually in much more solid condition financially to do so.
FACE sounds awesome! Do they have a website?
www.facespayneuter.org
www.indyferal.org
Lots of info on each.
www.facespayneuter.org (http://www.facespayneuter.org)
www.indyferal.org (http://www.indyferal.org) Lots of info on each.
Thanks!
As a postscript to this thread, I spoke with the charity to which I contribute the most and told them I wanted to trade some of my monthly donation for time worked. They were fine with that. So now I work a shift or two per month and that takes care of half my donation. Depending on how finances go, I could work it all. So thank you all for your viewpoints on the matter!
New Info: Our Humane Society finally after more than 10 years got a spay neuter clinic going. They opened in a low income neighborhood and are starting slow. That with the low cost shot clinic gives a location on our east and west sides of town. The north and south sides are higher income locations.
Will be interesting seeing if these two groups can coordinate at all or if the bridges have been totally burned. Cooperation would be so good to see.
When I was working I gave money to a hodge-podge of several charities. Now that I am living on less and have had time to be more organized I've cut back in the total amount and focused on a smaller number. I could definitely "afford" to give more and am well behind the 10% tithing.
This is how I look at (or justify) it. 1. I now donate time as a volunteer. A rough estimate of my volunteer hours is around 250 hours a year which accounts for some of my charitable contributions. 2. I have updated my end of life plans to include fairly decent amounts going to charity. So in the event that I don't really need all my nest egg for living expenses, a couple of my favorite charities will benefit. That way I don't have to worry about being overly generous and risking outliving my savings.
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