No riches? No problem. How you can still make an outsized impact, even if you’re on a budget
As the holiday season rolls around, there will be a lot of giving thanks and giving presents, but what about giving back? For many of us, the holidays are a time of reflection, so if you’ve been thinking this is the year you get into philanthropy — but have balked because you lack Bezos-like wealth — we can help.
Because it turns out, those of us of ordinary means can do extraordinary things even through modest giving. We spoke with Kevin Scally, the chief relationship officer at Charity Navigator, the world’s largest evaluator of nonprofits, to learn how those of us with a small budget can have an outsized impact. Read on for his suggestions.
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“Many folks feel like their donation is not going to make a difference if they don’t have huge amounts to give away,” says Scally. “But a donation of any size really does make a difference.” Philanthropy is always a team effort and “the more individuals that come together the greater the result will be.”
So unlike MacKenzie Scott, who literally cannot give her money away fast enough, you probably can’t start your own foundation or fund hundreds of organizations. But you can contribute to foundations and funds run by others, perhaps by making a small recurring donation — many nonprofits will let you give as little as $5 a month, which adds up over time, and is an amount you’re not likely to feel in your wallet.
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Make it a group effort
Toward that end, how can like-minded people pool their resources more directly? “There’s a movement called ‘giving circles,’” says Scally. “Essentially, people come together and have conversations around different areas they might support and they direct their efforts to specific groups on a monthly basis.” It’s a community-driven way of being a more active giver.
Scally says the easiest way to get started is to “check out a group called Grapevine that partners with Philanthropy Together.” At Grapevine, you can “search within your area to find like-minded donors to support the causes you choose. Grapevine does it virtually as well as in person.” Once you find a common interest with like-minded potential donors, you can work together to maximize the power of your donations.
Think outside your wallet
“All donations don’t have to be in the form of money.” says Scally. “Think of the three ‘T’s: Time, treasure and talent.” This approach allows you to contribute even if your budget doesn’t permit large financial donations.
“You can donate your time to a cause you like or are passionate about,” he says. “In fact, that’s a really good way to find where your passions reside: To try an organization, see how they operate and whether you make a connection. You can see the impact they’re making first-hand.”
“From the talent perspective, perhaps you’re a graphic designer or a social media maven or a great cook,” he adds. “There are organizations that have needs that align with your talents, and you may be able to donate those as well.” Remember, nonprofits need skills that you may have learned and honed in the for-profit world.
Scally also mentions that people can organize fundraisers or get sponsored if they’re running a marathon or other race, which is a great way to get other people into the habit of giving. As you probably know, Facebook and other online / social media channels allow you to encourage others to join you in donating to a favorite nonprofit.
Many of us also donate things we no longer need, like gently used toys or coats, or non-perishable food. You can even donate your used car. And even if your budget doesn’t allow for a large donation in this world, you can also give as a final gesture, by donating your life insurance proceeds to charity.
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Make a budget
How much should you give? And how should you do it? Scally advises finding “ways you can donate where you don’t feel the financial effect,” especially donating on a monthly basis. “Think of the cost of a coffee — maybe five bucks — or the price of lunch. If you donate that once a month you’re not likely not going to feel it in your budget, but at the end of the year you’ve donated $60 to an organization, and maybe that’s more than you could have done if you were making a one-time outlay.”
As for how much one should give, “there are people who give up to 20% of their income,” he says, “but I would say 3% is a good place to start and go up from there. That is a feasible number for most people. Like any financial decision, you want to make sure it fits with your budget and is sustainable to you.” You can always increase the percentage later if you find that it fits with your budget.
Prioritize what matters most to you
So that’s how to give. But you still have to choose what to give to. Charity Navigator assesses almost 200,000 different nonprofits, which means there are a lot of options out there. To make the choices more manageable, Scally says you should “give with your heart and your head.”
Giving with your heart
“You’ll likely have different areas of interest or passion — supporting your alma mater; giving to institutions that fund research into a disease which has affected a family member. You don’t find your passions, they find you. I would listen to those and support accordingly,” he says.
Bear in mind that you’re more likely to become a long-term philanthropist if you give to causes that you really care about. One reason we give is because it feels good for us, not just the recipient. There’s nothing wrong with that, especially if that feeling promotes further generosity.
“A friend of mine has a named scholarship for $1,000 a year at his alma mater that he funds,” says Scally. “He actually has the opportunity to meet with the student recipient on an annual basis as well, which is very cool.” That feeling of personal connection can open wallets as well as hearts. Funding scholarships, perhaps for as little as $500, can be arranged at many colleges, “perhaps via a general scholarship fund, or a named scholarship, depending on the college,” says Scally. “The school’s advancement office will be able to give you the information you need.”
“You don’t find your passions, they find you.”
—Kevin Scally, Charity Navigator
Giving with your mind
“The big thing is to be intentional and strategic with your philanthropy,” says Scally. “A lot of folks give indiscriminately; they see an advertisement or they’ll get direct mail and respond.” But you’ll achieve more and feel more purposeful “if you really sit down and think about what is feasible for you, and make a short list of nonprofits that are most important to you. Limit the amount of organizations you support so you get a greater sense of the impact you’re making,” he advises.
When you’re making that list, “make sure you’re supporting legitimate charities and that they are financially efficient, impactful and have a good reputation,” says Scally. “The way you can make sure they’re legitimate is to check that they are a 501c3 registered non profit – that’s an IRS sub code and you can verify that through an organization’s EIN (Employer Identity Number). All organizations are issued these. You can check them on the IRS website, or you can come to Charity Navigator and put in the charity’s EIN and verify they are a registered non-profit.” Another reason that it’s good to check that an organization is registered is that charitable donations are only tax deductible if they’re given to a registered 501c3 company.
As for making sure that a registered organization is using its funds well, Scally mentions that one of Charity Navigator’s main functions is helping people find out whether a particular organization is “financially efficient and impactful. Ten million donors come to us every year just to answer those questions” he says. “And we’re a 501c3 ourselves.”
Whether you’re giving money, time or something else, you’ll want to make sure it’s being used well.
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Our editorial policy
Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
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