How much should you give?

By Liz Pulliam Weston

You know many around you are in need. You feel compelled to help. Yet those who want to contribute are often left to wonder: Am I giving enough? How much should I give?

The issue gets even stickier in times like these when the economy stumbles. There's more need as people lose jobs and turn to charities for help with food, clothing and other necessities. But those of us who still have work may feel like we should be boosting our savings to cope with possible setbacks rather than giving more away.

Now, most of us give at least something to worthy causes. Two-thirds of U.S. households with incomes of less than $100,000 give to charity, according to the Giving USA Foundation, the leading researcher on philanthropy.

But many of us give "kind of willy-nilly," says Sandra Miniutti, the vice president of nonprofit evaluator Charity Navigator. About half of charitable donations are made between Thanksgiving and New Year's Eve, as people who itemize their deductions rush to get last-minute tax write-offs and others respond to an influx of end-of-year pleas or the spirit of the holiday season.

But if charitable giving is important to us, shouldn't we be a little more systematic about it? Shouldn't it be a part of our budgets from the beginning of the year, rather than just an afterthought?

And shouldn't we try to eke out a little more?

Savvy givers, Miniutti says, don't leave their contributions to the last minute. They take some time at the beginning of the year to decide what type of good works they want to support. Then they research their options to find the worthiest charities.They also concentrate their giving, rather than spreading themselves thin by handing out smaller donations to lots of different causes.

"It's the exact opposite of the stock market, where you want to diversify to reduce risk," Miniutti says. "If you concentrate on just a few charities, your contributions will make more of a difference . . . and the charity is likely to value you more."

That means, Miniutti says, that the charity will be less tempted to sell your name to other charities, which then pelt you with yet more appeals. These appeals are often a waste of money for the charities that send them out and are certainly annoying to the recipients, she says, but many nonprofits feel compelled to try to beef up their returns from small donors by selling their names.

Another reason to give more systematically: Donors who want a tax deduction can no longer write off the cash they drop in the collection plate or the coins they plop in a kettle. The Internal Revenue Service now requires receipts, canceled checks or other evidence to back up your deductions.

As for how much to give, Miniutti declined to give a firm answer, saying it's up to individuals to evaluate their own circumstances and ability to give. But, she adds, "most people say around 3%" of after-tax income is a good goal.

Continued: Make your dollars do the most good

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