Determining how to and how much to donate can be awkward. Finding both the sweet spot, that appropriate while not at all depleting amount of cash, and the most influential charities, preferably the ones that include a reasonable explanation of where your money goes exactly, may seem easier than it actually is. Luckily, a plethora of online resources like charity trackers, donation calculation machines and posts such as this one here are designed to help.

Before anyone decides how much of their annual income to give away to charity, he or she should look at the statistics. About 65 percent of households in the United States give some percentage of their earnings to charities. Many give due to religious obligations, but religion-influenced donations in total make up less than a third of annual giving. It’s the norm to be generous, as religious or as secular as one may be.

More data, found by a McClatchy analysis of the U.S. Bureau of Labor Statistics, reveals that in 2007 the poorest quintile of Americans gave a higher percentage of their incomes to charity than the richest quintile did. While the poorest Americans donated 4.3 percent on average, the richest donated less than half of that, 2.1 percent. Of course, 2.1 percent of a large income dwarfs 4.3 percent of a small one.

Looking at income is a good place to begin to gauge how much one can feasibly give to charities. Instead of giving a fixed amount, try giving a percentage of that income. If 4.3 percent is too high, try 4 or 3.5 percent. If it could be higher, try 5 or 6 percent. As long as a household can still afford the irrefutable necessities and maybe simple luxuries, it’s probably not giving too much.

“You should be able to pay your bills, cover expenses without the use of credit cards and put some savings away for retirement before you make a donation to charities,” says Laurie L. Dove of How Stuff Works, an online educational site.

Paying off mortgages, grocery bills, electricity and heat bills, insurances, etc. is all deemed essential. Other expenses such as snacks at the movie theater or Diet Cokes from Stop&Shop are not. To increase the size and impact of donations, try withholding from hedonist pleasures, the costs of which add up. The more one restrains oneself, the more one saves, and the more one will be able to donate. And, let’s be clear, not having a Diet Coke never hurt anyone.

Even if a household cannot donate what it deems a substantial amount, maybe only 1.5 percent of its annual income, there are certain tricks to facilitate efficacy. One idea is to only give to a single charity. Having significant impact in one area will probably be more rewarding than having little to no impact in many. Good charities can be found at sites like Charity Navigator, BBB and Charity Watch.

Finding highly rated nonprofits is a good bet. As John Stossel from Fox News puts it, the less transparent a charity is, the less one should want to give it money.

“The definition of ‘charitable work’ is rarely clear. How should the board of a nonprofit’s first-class hotel expenses during a trip to Africa be classified?” he asked. “That’s why I give to charities I can watch.”

Another idea is to give monthly. If each donation seems measly, try thinking in the long term: donations are cumulative and in a year, the small monthly donations will coalesce into a larger one. In ten years, the annual donations will coalesce. Not everything has to be given immediately or in the present. Donation schedules help.

It’s understandable if a household living on a limited income can only donate a small amount of money. And fortunately, there are other ways to donate: one can give time by volunteering or canvassing; one can give attention by studying the issue and one can raise awareness by hosting living room forums. These things help, almost as much as a percentage of annual income does.

– Adam Kaminski

Sources: Fox News, How Stuff Works
Photo: moils