Giving Away $100,000 and Making it Count
My husband and I have never been percentage-of-income donors. Instead, we choose dollar amounts that feel reasonable (but may stretch us) and organizations aligned with our values.
Our giving themes focus on four main areas: women’s rights and education, financial literacy, supporting the families of enlisted troops (my husband is a former helicopter pilot for the Navy), and animal welfare. We started tracking our charitable giving a few years after we married:
- In 2014, we gave a combined $2,750 across two organizations. The following year, that amount increased to a total of $3,380 across three organizations.
- In 2017, we committed to a two-year giving pledge that stretched us financially but saw our giving jump to $8,790; in 2018, it went to $16,884 across ten organizations (but four causes) throughout the year.
- In 2019, we opened a Donor Advised Fund and began adding assets for future grant-making, while also continuing to give to causes important to us in real time.
- Our annual giving has remained steady since 2018 and we closed out 2022 with annual donations at $21,660, bringing our total since 2014 to $104,600.
Setting Goals for Giving and Tracking Progress
Looking at the annual breakdown, what you really see when we talk about giving six-figures away is the cumulative impact of setting goals and tracking progress along the way. For us, giving is about the journey and not the destination.
So how do we actually go about it? We set aside funds each month into an account marked for donations. We use some of those funds throughout the year for immediate causes that pop up – helping our cleaning lady with her car troubles or a GoFundMe campaign for stories that hit our hearts – and we donate larger chunks during the fourth quarter of the year.
We look for impact when we make our grants and donations: reflecting on the type of support a donation might provide, the burden being lifted off of a family, or an education being provided. Instead of donating to “general” funds, we direct our funds towards specific issues being targeted by a non-profit.
I also keep track of each entity we’ve donated to (whether a non-profit, GoFundMe, or a check to a friend) not just as a record of what we’ve given, but also as a “reverse bucket list” of sorts. Sitting down at the end of each year and seeing what we’ve given throughout the year (and in years past), along with our cumulative efforts, motivates us to keep going and to further the impact we make.
The Benefits of a Donor-Advised Fund (DAF)
In recent years, our donor-advised fund has become a bigger topic in our family. Our kids are still young but our goal is to include them in conversations around giving to understand why we give (and how lucky we are to be in a position to do so). When they’re older, they’ll be brought further into the giving conversation; we’ll use that opportunity to explore their unique values and ways their giving can create impact in their lives and for the causes they care about.
Donor-advised funds (DAFs) are a flexible and tax-efficient tool for charitable giving. They let you donate cash and appreciated assets such as stocks, mutual funds, or real estate and receive the full tax deduction for your charitable donation (while skipping any capital gains taxes you may have owed on the assets). When the time comes to give funds to a qualified charity, you don’t owe any taxes on the donations.
Additionally, when you contribute to a DAF, your contributions are invested and can grow over time. Then, when you’re ready, you request a grant from those funds to charities of your choice. Essentially, DAFs are a way to both invest and donate in an intentional and impactful way.
How to Get Started
It’s important to remember that your giving journey, just like your financial plan, will be unique to you. It should be customized to your budget, goals, and values. That said, you must always remember to check off your baseline financial goals first like emergency fund, retirement savings, and paying down debt. When you’re ready to get started, remember: