How to give back the right way

September 13th, 2013 madmin

This material was prepared for Kevin Mote, LPL Financial Advisor, use.

It’s a great feeling to be financially stable enough to give back to non-profits and other organizations you support.

But where do you start? And how much of your disposable income should you donate, as opposed to putting into your nest egg? Here are some tips to help fit charitable giving into your financial plan.

How do you decide who to support financially?

Find something you are passionate about. Everyone has different passions and experiences. For example, some people may have a family member who went to a certain hospital, so they may want to support the hospital or affiliated organizations such as the Ronald McDonald House.

Other people may find it easier to give to bigger organizations, such as the United Way, because they support many charities within the community.

How much should you give back?

This will be different for everyone. Don’t feel like you have to donate a certain amount or percentage of your income. Just give what you are able.

Start your charitable giving in baby steps. Pick one organization and give a little at a time. Make sure you don’t get caught up in giving more than you can afford. If you want to give more, volunteer your time, and a few years later you may have the means to give more.

What about the standard five to 10 percent tithe?

Not many people can donate five to 10 percent of their income. As the treasurer of my church, I see very few people who can do that. But it doesn’t mean they aren’t giving their time. You can work for different causes and volunteer. Giving back doesn’t only mean contributing financially. If you can’t give a lot of money, sort through your belongings and take things you don’t use or want to Goodwill and use it as a tax write-off. Or, donate your car you won’t get more than $1,000 for.

How do you fit charitable giving into your financial plan?

After retirement, evaluate where you have surplus income.

In addition to supporting children and family members, many people choose to donate a percentage of their life insurance pay-out to go to a charity of their choice. You can also allocate a percentage of your trust to charity.

To make giving easy, charities, especially churches, are benefiting from a program called Simply Giving. Set up an account associated with the organization and a specific amount you want to give every week, and the money is automatically withdrawn from your account. This type of automated giving makes it easy for you, as well as charities.

Supporting charitable organizations doesn’t have to be complex, stressful or time-consuming. Take some time to determine how much you can afford and simply start.

Kevin Mote is a LPL Financial Advisor located at MidWestOne Bank. He specializes in investments and retirement planning.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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