As 2010 comes to an end, many people are looking at a pile of requests for year-end donations. We know it's wise to set a budget for personal giving to worthy causes – but how much is the right amount?
The New York Times had an amusing headline earlier this year. It says, "How much to donate? God Knows."
Many churches advocate for tithing, which is giving ten percent of your income to charity. But that's not typical for most people.
Putnam Barber is expert on non-profits who teaches at Seattle University. He says the national average has been steady for years.
"For a long time, the typical household in the US has had an annual donation of about two percent of their disposable income," Barber says.
Barber also blogs for the good causes site, Idealist. org. He says donating two percent of your take home pay is a good place to start. But he thinks most households could actually do more.
"If you looked at what you have as disposable income and do two percent of it, you're going to be doing great. So start with two percent and aim to go up from there."
He says a good way to increase your donations and feel good about it is by creating a personal philanthropy plan. You can do that at the end of the year by making a simple list of causes you care about and dividing up the money you've allocated for donations.
"But what we encourage people to do is to plan out their charitable giving for the whole year," says Thom Allison.
He's president of the Puget Sound chapter of the Financial Planning Association. His firm, Allison Spielman Advisors, includes personal philanthropy in their financial planning packages. And he says many of his clients donate between ten and twenty percent of their disposable income. But he says planning is key. He suggests making a new year's resolution.
"Make it a goal to get a plan mapped out by the end of the first quarter, of next year. And make it a goal to do that every year."
In the end, how much you give is a very personal decision. Allison and his wife schedule a weekend getaway in January each year to map out their plan. Once that plan is in place, it's much easier to respond to the requests for donations to good causes that come throughout the year.
There are also lots of great resources for evaluating groups if you're not sure where your money should go. The Seattle Foundation recently began making available on its web-site information about the goals, finances and even the effectiveness of many Washington-based and regional non-profits.
The secretary of state's office has a very thorough FAQ on charitable giving on its site as well.