Budgeting for Generosity: How to Navigate the World of Charitable Giving


Sometimes it feels like we are being bombarded by donation requests everywhere we go. Your friends post their requests for charitable giving on social media: “It’s my birthday!” they say. “Please donate to my favorite cause!” or “I’m running the half-marathon for charity, and I’d love your support!” Children knock on our door, fundraising for school trips, sports teams and extra-curricular programs (and good luck saying no to that…)

It doesn’t stop there. There are people in your network who launch crowdfunding campaigns to fund a new business endeavor or raise money for a friend in crisis. You have coworkers with causes might feel obligated to support, especially if you sense that donating money will be good for office morale. Political candidates send us a constant stream of snail mail and email, urging us to make campaign donations in exchange for their pledge to implement the political agenda that aligns with our own beliefs. Those of us living in urban areas are likely to encounter several homeless people on a daily basis, asking, “Can you spare some change?”

Can you spare some change? That’s a good question—and one to keep in mind no matter who is asking you for money. How much money can you spare? If you donate to every good cause that crosses your path, you could be broke in no time. Charitable giving is incredibly important — but so is your financial stability. This is why it is so important to figure out how much money you can afford to give before you reach for your debit card or hand over your hard-earned cash. Generosity is a beautiful thing, especially when it is budgeted in as part of your thoughtful personal finance strategy.

According to Erin Lowry, a personal finance expert and author of Broke Millennial, smart giving comes down to having a budget.

“You have to run that cash flow,” she says. “How much money is coming in? How much money is going out? The difference is the money you have left over to spend on non-essentials. Remember that the money that’s “going out” should also include money you’re putting into savings.”

charitable giving
Photo: Matt Collamer, Unsplash

Lowry offers the following perspective. “I completely understand the passion and the interest; why people want to donate to all of these causes, especially in light of our current political climate — but you also have to take care of yourself. I describe this as putting your own financial oxygen mask on first, before assisting others.”

“If charitable giving is important to you, figure out how to fit into your budget to the best of your ability, even if that means you’re only giving a small percent [of your income]. It’s still something. That’s great. If it’s just $5 a month, that’s still great. Just be sure to put it in your budget.”


Lowry also recommends paying attention to whether or not your donation is tax-deductible. “If giving is part of your practice — which I hope it is for everyone — take the tax write-off! Get in the habit of doing that, because it is there for the taking. That’s what the wealthy would be doing—it’s just a good habit to have.”

In addition to calculating your personal budget for donations, charitable giving expert Laura Arrillaga-Andreessen points out the importance of determining which causes will enable your dollar to make the greatest impact. Arrillaga-Andreessen is Founder and President of LAAF.org, an organization that educates people on strategic giving, and author of Giving 2.0: Transform Your Giving and Our World.

Arrillaga-Andreessen recommends understanding the measurable impact of your potential gift prior to making a financial contribution. “Understanding the meaning of your giving is what transforms that meaning from momentary joy to longer-term fulfillment,” she says.

charitable giving
Photo: Peter Dazeley

Lowry agrees. “If you’re giving money to an organization, especially on a routine basis, you will want to make sure that your money is going where you think it’s going,” she says.

This means checking sites like GuideStar and Charity Navigator to see how the organization is rated in comparison to others in the same sector. The same due diligence should be applied to political candidates. Before making a campaign contribution, Lowry recommends that you “really vet who they are, what they’re doing, what their track record is, and where that money is going.”

Like many of us, Lowry says that she sees frequent posts asking for money on social media, but she makes a point to follow her own advice. “I’m not donating every single time somebody puts one of those things up. I’m just not in a position to be able to do that. I’m not broke — I have a healthy financial situation — but (a) I have my own priorities as to what I want to contribute to, and (b) not every cause I am presented with is going to be something that aligns with my personal set of values. That’s another thing you have to consider.”

In general, Lowry says that she is not a fan of birthday donation requests — pointing out that most of the people who will see your post on social media probably weren’t planning to get you a birthday present anyway. She proposes an alternative method.

“I believe it’s helpful to start by thinking of the people in your life who would actually get you a birthday or Christmas present. Say to them, ‘You know, there are only these two things I want or need. Other than that, [in lieu of additional gifts], please donate to [insert charity of choice]. My sister and I both do that at Christmas.”

Lowry says she has asked for donations to her favorite animal shelters and rescue charities, while her sister had a different request. “My sister lives in Los Angeles, and there’s a major homeless crisis in L.A. She asked for $10 McDonald’s gift cards to keep on hand to give to homeless people so they can go get a meal. For her birthday, my sister also asked her friends to donate books, feminine hygiene products, and nonperishable goods that she could package into big Ziploc bags and give to women in need.”

charitable giving
Photo: Raw Pixel, Unsplash

As Lowry’s story confirms, the way in which you choose to give back isn’t as important as committing to making a positive impact on a cause that matters to you. Whether you give money to a nonprofit or hand out goods to people in need, you’re still making a difference. Arrillaga-Andreessen takes a similar stance. “I believe that anyone regardless of age, background or type of resources can be a strategic philanthropist and have a transformative impact.”

If you want your individual donations to carry more weight, Arrillaga-Andreessen suggests joining a giving circle — a group that pools money in order to make larger donations together. “For example, Giving Circles Fund is an innovative platform that enables emerging philanthropists to give collaboratively while learning strategies for effective charitable giving. By contributing smaller, fixed amounts, philanthropists of all backgrounds — including high school and college students — are scaling their social impact and proving that anyone, regardless of the size of their gift, can be a strategic philanthropist.”

Another important note: remember that when people ask you to donate money, you’re allowed to say no. You shouldn’t feel obligated to give a little bit to every cause. It’s okay if you feel that you will be able to make a bigger difference by giving larger sums of money to just a few key causes that you care about most.

Lowry also reminds us that not all charitable giving is monetary. “If you can’t financially contribute because every penny matters in your budget, you can donate your time.” Seek out volunteer opportunities at reputable organizations that support the causes you believe in.

When in doubt, Lowry says, ask yourself what you can do to help others that won’t compromise your financial situation. “It can be something simple. [For example], if you’re a graphic designer, you can donate your time and talent to design a flyer, business card, or event invitation for a nonprofit organization. Technically, time is money — so if you have the time, that’s what you can provide.”

charitable giving
Photo: Tim Marshall, Unsplash

Regardless of income, the bottom line is that every single one of us can afford to give back in some capacity. If it feels counterintuitive to you to simply give away your hard-earned cash, consider volunteering your time at an organization whose mission you support. Once you see firsthand where your money is going, you may feel inspired to make a donation.

Still not convinced? Take into consideration that charitable giving has been proven to have positive physiological changes on the brain, with effects similar to activities people usually associate with joy and happiness such as eating, exercising, or affectionate gestures like giving someone a hug. Giving back could have other positive effects on your life as well, like reducing stress, providing a sense of purpose, and offering some much-needed perspective on your own life. Remember, when you volunteer or attend charitable events, it’s a great opportunity to connect with other kind, like-minded people..who knows, maybe you’ll even stumble upon a new romantic partner along the way!

In the end, charitable giving isn’t mandatory, but we should treat it as part of our responsibility as a human being. When we participate in the cycle of growth and gratitude, giving back is our way to bow to the universe and celebrate all of the wonderful things we have to be thankful for.



Search for charity organizations and volunteer opportunities:

Idealist – connects people who want to do good with opportunities for action and collaboration

VolunteerMatch – matches inspired people with inspiring causes

All For Good – search for opportunities and volunteers or start your own charitable project

Catchafire – skills-based volunteer matching


Research reputable charities:

Charity Navigator – guide to intelligent giving

GuideStar – complete, up-to-date nonprofit data


Download Charity Apps:

ItsDeductible – charity donation tracker

Charity Miles – earn money for charity every time you walk, jog, hike, or ride your bike

CharityBuzz – bid on extraordinary experiences and luxuries to benefit charities making an impact