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Charitable giving

Chris Farrell Dec 5, 2008

Question: If I only have XX dollars in discretionary funds this year, what’s the best way to spend them? Local food banks? International aid? Just a favorite charity, for a favorite cause? Split the dollars among all of these? I have some funds earmarked for charitable giving, and I know other donors (like corporations) are reducing their gifts, so I want to know how to make my giving really count. Joan, Moscow, ID

Answer: This is a really important question with the economy in a recession that is getting worse by the month. Employers slashed 533,000 jobs in November, and the unemployment rate has jumped to 6.7%. The broadest measure of unemployment, a figure that includes marginally attached workers and employees laboring part-time, stands at a dismaying 12.5% or 19.3 million workers, up from 8.4% a year ago, or 12.9 million employees. These numbers are dry reflections of hard times, from a family losing its home to foreclosure, a 50 year old worker getting a pink slip after a quarter century on the job, a recent college graduate working at temp jobs all over town, a single mother facing a sharp cutback in the number of hours at work, and so on.

It’s also December, a traditional time for giving, partly because of the holidays but also for tax reasons. Uncle Sam gives you a tax benefit for charitable giving, but it has to be done before the end of the year to claim the deduction on your 2008 tax returns.

Of course, Americans get together all the time to share their concerns and passions, especially when it comes to improving their communities and society. We give money and time to support the arts, contribute to schools, build affordable housing, and tackle all kinds of social problems. We do all this activity through all kinds of charities, nonprofit organizations, and religious institutions that range in size from small groups of volunteers working out of a basement office to national fraternal organizations with several hundred thousand members to multi-billion dollar enterprises with skyscraper headquarters and global ambitions.

To me, what to give to at this time of need is a very personal decision. Hunger is a real problem. So is homelessness. But many community arts organizations also are facing financial pressures. What you want to give to may change over the course of the year. The problem most of us will face is having too little money to give. I know I’m not giving any specific guidance, but I think there are many worthy causes at a time like this. I do tend to like concentrating my charitable giving, but again, I don’t think there’s a right or wrong here.

Before giving, though, I would check on the of the watchdog groups that are available once you’ve focused in on an area. For instance, the Better Business Bureau has long kept a close eye on nonprofit organizations. The American Institute of Philanthropy promotes informed giving. These organizations prize financial openness. They frown on charities that operate with steep administrative costs or cozy insider dealings.

But this is a good question to open up to listeners and readers. Any thoughts on where to give during the recession?

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