Vermonters are caring people. We rank 9th in the country in helping our neighbors as volunteers.
During the holiday season, many of us also make financial donations to our favorite charities. According to Guidestar, which tracks the activities of thousands of nonprofits on its free website, half of the charitable organizations it surveyed receive the majority of their donations from October through December.
In our discussions, my wife and I generally focus on three questions: How much should we give? Should we spread it around to a lot of nonprofits or give bigger gifts to a few? And how do we make it fun?
Let me start with the question of fun.
A couple of years ago, we discovered that separating the decision of how much to give in total from the question of how much to give to each organization greatly increased our enjoyment. Once we figured out the total amount and set it aside, it was much easier to write the individual checks. The money was no longer ours but had become a pool that we could draw from to support the causes and organizations we believe in.
And we love the fact that because donations are tax deductible, 30 cents of every dollar we donate is money that would otherwise go to the government in taxes. In fact this year, by donating appreciated stock, we also avoid paying a capital gains tax and the government becomes our 40% partner.
How much should our family donate?
Many religious organizations recommend or require tithing one tenth of your income. Some financial planners recommend giving 1% of your net worth. For every family, it’s a personal decision, but we’ve found it helpful to measure our decision against a metric like our annual income.
Once my wife and I have figured out how much to donate, the question is whether we should support many or just a few organizations. And because there are so many great nonprofit organizations doing critical work in Vermont, it’s easy to end up writing lots of checks. We always write larger checks to organizations with whom we have a personal connection and smaller checks to causes we believe in.
Recently, we’ve started to mull over the benefits of allocating more to international organizations where our donations might have more impact. A couple of years ago we asked Tom Roberts from the Vermont Community Foundation for his advice. He suggested that each year we choose one organization where we would make an especially large gift. Doing that the last few years has allowed us to feel we are helping that organization in a particularly meaningful way.
Winston Churchill wrote, “We make a living by what we get, but we make a life by what we give." And as part of the holidays many of us rediscover, as the saying goes, “all that’s really worth doing is done for others.”