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Should you ever do charity giving during your financial journey?

In our ongoing topic of holiday traditions and money, we’re going to focus on the subject of charity giving.

Americans are, by far, one of the most generous nations in the world. It is, for this reason, there are so many charities in the U.S.

Going into the holiday seasons, charitable giving increases exponentially as Americans spend more in general.

I’ve known many Americans despite being deep in debt being willing to scrape together a few pennies in order to give to charity. We definitely fell in this category while we were paying off our debt.

It is this graciousness that has endeared the United States to many different developing countries through the years.

However, when it comes to charitable giving and your financial journey many people have considered whether they should give while paying off debt. After all, many different personal finance websites suggest that you hold off on giving until you’ve paid off your debt.

Even more, there are many charities that work as scams that have taken advantage of people’s generosity. How do you know how to avoid these charities?

Appropriately navigating the right charity to donate to is incredibly hard!

Here is everything you need to know about charitable giving during your financial journey.

Should you give to charities?


Most personal finance people will say you should avoid charitable giving until you are fully out of debt. It is possible for you to not donate money, there are many other ways that you can do charitable giving.

The definition of charitable giving is broad and doesn’t require you to give money.

What is charitable giving?

When most people say the words charitable giving, it usually makes most people think of giving money to charities.

However, there are many other ways to give charitably to charities, to name a few:

  • Donating your personal time as labor
  • Donating household items such as clothes, shoes, etc.
  • Donating food to charities
  • Donating large possessions such as cars and homes
Clothes in hand

There is just more to charitable giving than just donating money and items you own. There are benefits to you as well!

4 benefits to charitable giving that people always forget to mention

1. Charitable giving can help decrease your tax bill/increase your tax returns

Because we are a personal finance site first before everything else, charitable giving can give you a tax break!

More often than not, people forget that any charity giving can be deducted from your tax bill as long as you have a receipt. This can make a big difference in your tax bill especially if you are on the edge of a tax bracket.

When making a donation, make sure to ask for a receipt for your donation. Whatever you do, do not make a spur of the moment donation.

Instead, you will need to cut a check or pay by credit card.

Yes, this means that you should avoid rounding up on your grocery bill or put several dollars into the buckets. If you end up donating possessions, make sure you ask the workers to write an inventory of what you gave along with the approximate cost.

As April comes around, make sure you put up all your charitable giving before visiting your tax preparer or preparing your own taxes.

2. It allows you to help those who are in need

Everyone has had times of need where they were in trouble but had someone help them out.

Sometimes this can be in the form of a friend, a family member, or just a stranger. Regardless, it is rare that people are capable of pulling themselves out of need without any help.

You might think there are plenty of government programs available to help people who are in need. There are a lot of programs. However, there is still plenty of people who need help.

man sitting on park bench

By giving and donating time to charity, you are able to help who are hurting and needing help the most.

3. It makes you feel better from helping others

This might surprise you but, people who volunteer and give charity have higher feelings of life satisfaction.

You might think people who give money and work are generally unhappy people. After all, they have less money to spend on themselves and time to spend decompressing.

I hate to break it to you all, if that is what you believe, then you are very much wrong. It’s actually the exact opposite!

As a matter of fact, for people who give they report higher life satisfaction from donating. In this paper, they mention papers that looked into charity giving found similar increases in life satisfaction.

Volunteering might have even better effects on you than you realized! Based on this study, it suggests people have higher life satisfaction from volunteering than people who don’t. As a matter of fact, people who are unhappy have the most to benefit from volunteering.

It is almost as if people who volunteer and give charitably end up feeling better about themselves from helping others!

4. It might lead to something unexpected

This is especially true in the case that you are donating your time to help with charities. You may end up meeting someone who can help your career or personal life. 

For a little bit more perspective, I’m going to give it to Mike to talk more about his experiences.

Mike: When I was doing my undergraduate, I was like most male college students. I had no clue what I wanted to do. Well, other than living to play video games and trying to get dates (which I wasn’t very successful at).

One day, a girl who I had a crush on suggested I go volunteer at the local hospital for her. While I never ended up dating the girl, that volunteer position turned into something way more.

I ended up getting my first full-time job from that volunteering position.

That full-time job set me on a career path where I ended up moving through several states and finally meeting Amy. 

You never know what will happen when you donate your time and money to charity!

Who should I give to?

Whichever charity that you decide you want to give to!

Know that not all charities are created equally. So before doing any charity giving, make sure you vet the charity. 

This might come as surprise to many people, but some of the well-known charities are not great at doing their job.

Often times, charities don’t do a good job by paying the salaries of their executives or workers more than the work they’re doing. More rarely, some charities have outright committed frauds to get money. 

For this reason, before we give to any charity, we make sure to vet them on Charity Navigator

Charity Navigator is a website that looks through the finances and other traits of a charity and assigns them a rating from 0-4 stars. 0 stars being the worst at accomplishing who they claim they are helping, while 4 is they are excellent at helping the people they claim to help. 

Charity Navigator has helped me avoid donating to some charities that I used to hold in high regard. Make sure you vet your charities before donating. 

How to give?

Once you’ve decided which charity to give to and vetted them on Charity Navigator, you should call the organizations for different ways to give. 

Most organizations at this point offer the opportunity to do charity giving online. Make sure to use this to your advantage for two reasons:

  1. It allows you to pay with a credit card which allows you to build points
  2. It gives you a record of your donation for tax purposes. 
Make a change

On the other hand, if you plan to donate possessions, make sure to ask the charity for a receipt of the value you’ve donated. 

If you do plan to donate your time, know that some charities will require to go through a background check before you can start working. 

Regardless of your financial situation, whether you are deep in debt or working on the last $1,000 to your retirement goal, you should be able to give to charities. There are too many opportunities that you are missing out for yourself to not do so!

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Do you donate to a charity yourself? If so, what charity/charities do you donate to?

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