2million - My Journey to Financial Freedom

A Personal Finance Blog      ANNOUNCEMENT:2million has moved to www.2millionblog.com.     

Thursday, November 10, 2005

Planning My Annual Giving

Whats the right amount of monetary charitable giving?

This is a pretty touchy subject, not many people talk opening about their annual giving unless they like to brag about giving large donations.

I'll be honest, I have probably been on the small side with my annual giving for the 4 yrs that I have been working. I usually donate some amount to 1-2 charities in IBM's annual Employee Charitable Contribution Campaign and then haphazardly make 1-2 additional donations during the year. One of the main charities I donate to is the Junvenile Diabetes Research Foundation (JDRF).

The one thing I haven't done is much planning on what I want to give annually. For the past 4 yrs my goal has been just to increase my annual giving. It has been unpredictable, and more about the mood I am in when I make a donation then following a plan about how much I would like to give.

I need a rule of thumb at least for the next couple of years that will help me give a set amount that I feel reflects the contributions I want to continue to make to charities. In addition this rule of thumb should not hinder me from reaching my financial goals so I can ultimately donate generous amounts of time helping charities in my early retirement ;-).

I think the best thing I have heard is mms rule of thumb annual giving equal to 1 day of salary. That isn't all that much, but I think it sets a good pace that I can build on as I get closer to my financial goals. However for every $100,000 salary someone makes, we are only talking about a measly $273/yr. If over ones entire life they only averaged 1 day of salary per year in annual giving, we are only talking about .27% of what they earned. I sure hope to do better than that.

I am going to mail a donation for the remaining amount I want to give to the JDRF today (just so happens I got another donation request form them yesterday). This will bring me up to the one day's salary for this year in terms of annual giving.

Now back to focusing on reaching my financial goals so I can focus my time in early retirement to worthy causes!

5 Comments:

  • IMHO, 0.27% is not enough. I think everyone should give away 1% of their gross salary.

    By Anonymous Anonymous, at 2:47 PM  

  • Good for you for even talking/thinking about the subject. Far too many people simply ignore it and let their giving happen by accident.

    I agree that 1 day of salary per year is waaaaaay to low. I'm even surprised that someone would suggest that as a guideline, it's so pitiful.

    We started giving many years ago and raised 1% of our salary per year over several years. We're now at the point where it's the biggest "expense" we have -- though we don't see it that way. Instead, we look at it as giving back and helping others. We're the kind of people that believe people should help people and not rely on the government for all sorts of charity.

    I'd suggest you start as high as you can as a percentage of your salary (1%? 3%? 5%?), then keep adding a percentage per year for the next 10-15 years. The feeling of helping others is something that money can't buy, and you'll almost become addicted to giving.

    Finally, in a strange contradiction of how things work, it seems that the people who give the most also see their incomes rise the most. See the post I wrote on the subject here:

    http://www.freemoneyfinance.com/2005/09/a_thought_on_gi.html

    By Anonymous FMF, at 2:56 PM  

  • Ha - I guess its easy for me to discuss because this blog's anonymous.

    You know I guess I have always put planning annual giving aside thinking I'll focus on that when I am financially free (for some reason I think a lot of younger people do this). I like the idea of starting at what I think is a reasonable level now and increasing it annually.

    Also kudos to you fmf - I remember your Katrina donation matching drive!

    By Blogger 2million, at 4:00 PM  

  • Wow - .27 isn't even in the ballpark! My husband and I give away 10% of our annual income, allocated as follows:
    4.4% to charitable organizations
    4.4% to extended family & friends 1.2% to political causes

    By Anonymous Anonymous, at 9:32 PM  

  • In my view, if you have to pull out the calculator and actually compute the % of your income that you are giving away then you've missed the whole point of giving.

    Using the % as a measuring stick against others and a justification for one's higher moral purpose is also missing the point.

    By Anonymous Anonymous, at 1:25 PM  

Post a Comment

<< Home