By Steve Seals
The season of giving is here! Along with sharing gifts with family and friends, this is also a time when many choose to support meaningful causes. Whether you’re new to charitable giving or a seasoned donor, thoughtful planning can help your contributions make an even bigger difference.
Before making your donation, consider these important steps:
Know the “Why” Behind Your Donation
It’s essential to know why you want to give. While it’s always admirable to donate to a charity even if it’s on a whim, strategic and planned charitable giving might have a greater outcome for both your financial situation and your charity of choice. Choosing to give is a deeply personal decision and thus deserves time for consideration. Think through your values, the causes that you find important, and whether you’d be better off giving your time, your money, or even both.
Along with helping others and feeling good about making a difference in someone’s life, charitable giving also enables you to set a good example for your peers and children. You can teach your children about the importance of giving back and using money for a worthy cause rather than a toy that happened to grab their attention while you were shopping.
Lastly, there can be potential tax benefits when you donate, namely in the form of tax credits. This will depend on how you choose to give; whether it’s cash, gifts in trust, donor-advised funds, or another form. Even if you’re donating solely to give back, it’s important to understand the potential tax benefit.
Determine the Amount
Don’t assume you can’t give back if you aren’t a millionaire. Even small donations can make a big difference. According to a study by Harvard Business School, people who engage in prosocial spending, including giving to charities, are happier on average than those who do not. An excellent way to get started is by simply giving what you can.
Set a goal of how much you’d ideally like to give each year. Then, build it into your monthly budget so the donation isn’t a “surprise” to your cash flow at the end of the year. You may decide you’d rather give smaller amounts more frequently, such as $25 per month, instead of one lump sum, like $300 per year. Don’t forget to check if your employer will match your donation. This can help make smaller donations more impactful to the charity.
Remember, there are other ways you can give back if you don’t have a lot of extra room in your budget. Many charitable causes have a greater need for volunteers than donations, such as organizations supporting social interaction for children or the elderly. You may also consider using your professional skill set by working pro bono for a cause you’re passionate about.
Choose a Charity Connected With Your Values
Rather than donate to the most popular charitable organizations, select charities whose purpose means a lot to you. This may be animal welfare, education for children, the environment, or another initiative. Take time to research organizations on both the local and national level to find one that speaks to you. Finding a charity that aligns with your values can help you feel more connected to the cause and stay motivated to continue giving.
Remember that not all giving is created equal as not all organizations use donations the same way. The charities that spend the most donated dollars on marketing are probably the first ones you’re likely to recognize and who contact you consistently. Vet each charity you consider to make sure your donation is going to your intended recipient. One way to do this is to look up the organization on the IRS charity listing or GuideStar. You can verify their legal status, check their financial records, and more.
Starting Your Journey
Charitable giving can be a rewarding way to make a meaningful impact with your money, provided it aligns with your budget and financial plan. Many find that the joy of giving far outweighs receiving. If you’re interested in incorporating charitable donations into your financial strategy, our team at Seals Financial Planning & Investments is here to help.
Reach out to us to explore the best giving methods that suit your goals. Please give us a call at (859) 230-3476 if you would like to schedule a time to meet.
About Richard Stephen (Steve) Seals
Steve Seals is owner and independent Registered Investment Advisor Representative at Seals Financial Planning & Investments VI, LLC, a financial planning services firm based in Lexington, KY. As an independent Registered Investment Advisor Representative with about two decades of experience in the investment and insurance industries, Steve’s firm is founded on getting to know each client personally, allowing him to provide sound financial advice throughout their career and into retirement. With the mission of guiding clients on the path of success, Steve is fueled by his commitment to excellence and goes the extra mile to make sure clients are fully satisfied. He believes in maintaining a positive mindset, creating partnerships with a purpose, and always striving for significant outcomes.
Born in Jenkins, Kentucky, Steve grew up with a love for basketball and serving his community. After high school, he served nine years in the United States Marine Corps, then earned a bachelor’s degree in accounting. He was eventually able to put his degree and desire to help others to work as a fiduciary financial planner. Prior to founding his own firm in 2014, Steve learned from working with Edward Jones, US Bank, University of Kentucky Federal Credit Union, and CUSO Financial. He also received his Security Series 63 and 65/66 through Keystone Financial Group, LLC, and holds various life, health, and variable insurance licenses.
Steve and his wife, Angie, have three daughters (Lauren, Peyton, and Ashton) and two grandsons (Kenyon and Kai). Steve holds a private pilot’s license, and the family enjoys sports, spending time at the lake, and traveling. To learn more about Steve, connect with him on LinkedIn.
