How to Give When You Can't Afford To

Money magazine lists 13 creative ways to maximize your charitable impact without writing a huge check as follows:

Maximizing Your Own Resources

• Dish out professional know-how, not just soup.
• Clean out the garage, attic, basement...
• Put your plastic to work. Plenty of credit cards promise to send a particular charity a cut of whatever you charge.
• Pick the right bank. You can do good and make money by parking your cash in a community-development financial institution: a bank or credit union that works with underserved people in a particular area or social group.

Getting Your Employer to Help

• Snag a match.
• Ask for dollars for volunteer work you're already doing.
• Suggest your pet charity for a company project.
• Toot your own horn.

Rope in Friends & Family

• Rethink your holiday wish list. This season, when your kids and pals start asking whether you'd prefer Santa's portrait or Rudolph's on your new sweater, ask for donations for your favorite charity instead.
• Throw a fundraising party. The next time you schedule a shin-dig, give it a charitable theme.
• Lace up your walking shoes.
• Create your own "a-thon."
• Ask pals to roll up their sleeves too.

Here's my take on these:

1. I like the suggestion of using your skills/knowledge to help out a charity. I serve as board president for a non-profit organization in my town.

2. We regularly clean out our closets (usually in the spring and fall) and donate to good stuff to the Salvation Army. We've also been cleaning out all the other rooms in our home and we give that stuff to a local charity that helps the needy.

3. IMO, charity credit cards are a waste since they usually pay such a low amount back. I'd rather get 2% back on my Schwab card and give that money away.

4. I'm not so sure that picking a bank simply because it helps the community is the way I want to select one. Again, I think you're best off picking the best bank for you and giving any savings they offer away versus picking a sub-par bank just to say you're "giving" to the community. That said, if a bank helps the community AND is the best option for you, it's a win-win.

5. My company doesn't match funds, but we do have several opportunities to give to charities such as:

• The company contributes generously to the non-profit organization I head. They're a major sponsor of our annual golf tournament.
• A few years ago, we had a company-sponsored bike-a-thon and raised over $40k for an orphanage.
• For the past two years, the employees' Christmas gift to the owners of our company has been a contribution to a favorite charity of theirs. We give about $3k per year this way.

6. The holiday gift list idea is a great one. If you'd prefer to help out a charity versus receive a present, why not ask people to contribute instead?

7. I also like the fundraising party. A friend of ours always used to have the best Christmas party of the year (she's since stopped having it) -- lots of good food brought from people around the neighborhood. She asked that each family invited bring a wrapped toy for a local charity. It was a GREAT way to blend fun and giving.

8. The other "friends and family" ideas are "ok" IMO, but these can get burdensome when you have 20 family members walking, biking or something for 20 different causes (and they want you to support them all.)

IMO, the best way to be sure you give is to budget for it -- just like you budget for food, clothing, rent, etc. Then you know it's planned and set aside and can give without worrying that it will break your budget.

Comments

[Old Limey]

The largest mutual fund company in the USA, Fidelity Investments, of which I am a longtime & extremely satisfied client, sent me an e-mail yesterday whereby I can select an animated & musical Christmas card to send to 10 friends. For each card I send Fidelity donates $1 towards purchasing musical instruments for school orchestras.
The offer can be used over and over again if needed.
I thought this was a great idea, of course I am sure Fidelity will add the new e-mail addresses to their distribution lists used to attract new customers so there's something in it for them as well.

[Kyle]

Instead of giving to one specific charity, where I'm not exactly sure what's done with my dollars, I have my own cause. My husband and I are putting one guy through college, here in Chile. That makes it near impossible to stop my donation because we know him, he's a real person, we chose him, and if we ever decide one month that we don't have the money that means he can't go to school.

It also makes the monthly budgeted amount easy since tuition only changes once a year.

[Paul Williams @ Provident Planning]

Old Limey,

Why Fidelity and not Vanguard? Just wondering

[Terry]

Low-wage job + Getting Your Employer to Help = LOL

[Crystal]

Terry, it isn't just low wage jobs that don't help...I work for a company owned by a self-made millionaire who is tighter than a fresh pickle jar lid.

[Meg]

"If you'd prefer to help out a charity versus receive a present, why not ask people to contribute instead?"

Because, from my experience, people get offended. Yes, my family was offended or simply ignored me when I asked them to do this.

[Old Limey]

@Paul Williams
I used to have an account at Vanguard back in the 80's. When I retired in 1992, I rolled my 401K into Fidelity. In the next year or two I started putting the computer software capabilities that I learned during my long career in aerospace to work, with the help of a proprietary database of mutual funds, market indexes, and fund families, to which I subscribed. I wrote my own software for ranking funds and fund families, and taught myself all about the technical analysis of stockmarket trends, and started writing my own computer program to fill an analysis void that existed in the early days of the Internet. Later I marketed my software to a considerable number of other investors that used the same proprietary database with considerable success. For many years I used my website to keep my customers advised of my own holdings at all times but I stopped doing that a few years ago.

One of my conclusions back then, after much analysis, was that Fidelity had the best family of funds for overall performance. That's when I consolidated accounts that I had with T. Rowe Price, Vanguard, Invesco, American Century and others, and moved them all to Fidelity. In the early days of the Internet, knowledge was hard to come by and with the proprietary database I had to work with I was able to trade the Fidelity Select family very successfully indeed. The coming of age of the Internet and the wide availability of large fund networks changed things. Now there is no earthly reason to have one's money spread all over the place and residing in accounts at different companies. Having one very trustworthy institution hold your assets greatly simplifies managing your money and is an especially good idea as you get older and have to consider estate planning and inheritance issues. I also find the Fidelity Active Trader Pro software to be an exceptionally well written and valuable portfolio management tool even though I don't use it for analysis. I have found Fidelity's 24/7 customer service to be incredible with the phone answered after very few rings. As your portfolio increases and you move up to "Premium" or "Private Client" access, the experience of the people you deal with also rises considerably.

Today, even though I keep all of my money at Fidelity, with thousands of funds at my disposal I only buy a Fidelity fund if it turns out that it is at the very top of my rankings and happens to be the best fund of its type at the time. Vanguard, T. Rowe Price, American Century, or other large trustworthy brokerage companies make equally good custodians and offer their own large fund networks.

The other issue that you and I no doubt disagree over is that I have no use personally for financial planners or advisors and manage an 8 figure portfolio of my family's assets without having to pay up-front load fees or management fees to a financial advisor. I am also proud to say that I do not believe in "Buy & Hold". I am a "Momentum" investor and strive to always have our assets trending upwards at all times, doing so has enabled me to compile an oustanding investment history since starting in 1992, especially during the DOT.COM bubble and more recently during the effects of the deep recession that we have experienced and the jobless recovery ahead.

[Sean "Uncommon" Payne]

As the authors of "The Millionaire Next Door" stated, "I am my own favorite charity."

That being said, one of my favorite ways to give during the holidays is to buy food, clothes, or presents for a specific family. If I don't have the money, then I have the time to help others, moving to a new house or chopping firewood.

[Paul Williams @ Provident Planning]

@Old Limey:

Not sure if you'll see this, but I just wanted to let you know that I don't think everyone needs a financial planner - especially you. Anyone willing to put in a little time to study and learn about personal finance can do just fine themselves. The only reason I have a job is because most people don't want to do this. I think it's a bit of a waste to pay me to do some pretty simple stuff, but I like it and others don't.

I appreciate that you hold a different investment philosophy than FMF or myself, but you don't attack him every time he posts about index funds and buy & hold investing. You've got a fascinating history and wonderful insights. I hope you continue to share!