Where Do You Give Charity, and Why?

This is the time of year when a lot of people give to charity, in part because of the holidays and in part because of year-end tax considerations.

Below you will find a few loosely connected observations about charity and then, at the end, some questions for all of you. It is probably not fair that I am not answering the questions myself, but the reason I’m not is that I think anonymity is an important part of giving (consider Maimonides‘s hierarchy of charity, e.g.). And, since this is my blog, I inevitably cannot be anonymous — but when you write a comment, you can if you want.

1. For starters, we have blogged in the past about: the economics of street charity; conservative vs. liberal giving; a charity called Smile Train that seems to be a model of efficiency; and peer-to-peer lending, which, along with microcredit, is arguably a form of charity.

2. Accountability is a big issue for many, if not most, people who give to charity. This article in yesterday’s Wall Street Journal discusses how people can perform due diligence on the charities they are considering. Obviously, people want to know how much of the money they are donating is going to the cause they care about versus how much is going toward buying office chairs, fact-finding missions, and ballroom dances.

3. I believe one reason that so many people give to charity is that, even though a great portion of their taxes goes to what could legitimately be called charitable causes, there is a complete and utter disconnect between the feeling of paying taxes (an onerous obligation) and giving to charity (an inspiring and self-satisfying act). But pretend for a moment that you are in a 40 percent tax bracket; don’t you ever find yourself thinking, “Hey, I already donate 40 percent of my income to various causes that have little to do with my personal well-being, so why should I give a penny more to ‘charity’?” (Although I don’t want to open up a tax can of worms, click here if you think that people who make a lot of money pay too little tax, and/or here if you think they don’t pay for their fair share of government services.)

4. Following from No. 3, I wonder what would happen if it were possible to have even a portion of our personal taxes targeted toward causes, or at least general areas, that we care about. Just think: if you could choose on your 1040 a number of options for where your tax money would go (feeding poor children, improving auto safety, providing medical services for the elderly, giving aid to military families, etc.), even if your choice only marginally altered the direction of your tax payment, would you feel more satisfied in writing that check? I suspect the answer is a firm yes.

5. Friends and I often have discussions about the ancient religious command to tithe, or give at least 10 percent of your income. One thing I find interesting about such discussions is a point that never comes up: that when tithing was first instituted, there was nothing remotely like the current tax system, whereby 30 or 40 or even 50 percent of your money was already being “donated.”

And now for the question(s):

Whom do you give to, and why? How important is anonymity — or, conversely, how important is the recognition? How consistent are you in your causes, and what makes you change your thinking? Do you prefer microcharities and/or people you know, or do you prefer big institutional charities, and why? How important is the tax deduction in your giving — and, since it rewards money but not time, does it make you less likely to donate your time? What are some particular charities that you love? If you were the King of Charity for a day, what would you change about the state of charitable giving?

I am not looking to use your answers as research per se, although I wouldn’t be surprised if many of them are interesting enough for me to follow up on in some way.

Thanks for your input, and happy holidays to all.

[Addendum: Reading through some of the comments posted in the first couple of hours, I realize I should have also asked this: For those of you who routinely don't give to charities, please say why.]

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  1. Maks says:

    I give to highly targeted causes: donating money to buy winter coats for an orphanage in Russia, sponsoring a local dog rescue group, refering people to employers, etc. The common thread is that none of the charities I deal with have any overhead or administrative expenses — every donated penny goes to the cause. Compare that to 30% overhead rate at United Way.

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  2. Maks says:

    I give to highly targeted causes: donating money to buy winter coats for an orphanage in Russia, sponsoring a local dog rescue group, refering people to employers, etc. The common thread is that none of the charities I deal with have any overhead or administrative expenses — every donated penny goes to the cause. Compare that to 30% overhead rate at United Way.

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  3. Jay T says:

    I gave to http://www.childsplaycharity.org/ because I feel bad for sick kids, and because I am a fan of and have met the people that run it. I think that their reasons for the charity are sound, and I’m very confident that they are operating with as little overhead as possible.

    I don’t need any recognition.

    I tend to be all over the place with my giving. I have a certain amount that I donate each year, and I just give to the places that happen to catch my interest.

    I donated to both micro and macro charities, so it doesn’t really matter to me.

    Tax deductions are not that big of a reason for me to give. I don’t tend to ever donate time. I guess I’m kind of selfish that way.

    I don’t think that there is any major thing that I see in charitable giving that stands out as a huge black mark. I know some charities are not as charitable as they could be, but I just avoid those.

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  4. Jay T says:

    I gave to http://www.childsplaycharity.org/ because I feel bad for sick kids, and because I am a fan of and have met the people that run it. I think that their reasons for the charity are sound, and I’m very confident that they are operating with as little overhead as possible.

    I don’t need any recognition.

    I tend to be all over the place with my giving. I have a certain amount that I donate each year, and I just give to the places that happen to catch my interest.

    I donated to both micro and macro charities, so it doesn’t really matter to me.

    Tax deductions are not that big of a reason for me to give. I don’t tend to ever donate time. I guess I’m kind of selfish that way.

    I don’t think that there is any major thing that I see in charitable giving that stands out as a huge black mark. I know some charities are not as charitable as they could be, but I just avoid those.

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  5. discordian says:

    1. We don’t tithe but do give to the church (RC) regularly.
    2. I’m an official volunteer at booksforsoldiers.com and have been sending care packages to our troops.
    3. Clothes and toys got to credible charities
    4. We also donate money to lymphoma and leukemia society via relatives that participate in Team in Training.
    5. Misc. other donations throught the year to other charities and school fundraisers.

    As to why – it just seems right. Hopefully what little we can give will be that extra little bit to save a life or reach a cure.

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  6. discordian says:

    1. We don’t tithe but do give to the church (RC) regularly.
    2. I’m an official volunteer at booksforsoldiers.com and have been sending care packages to our troops.
    3. Clothes and toys got to credible charities
    4. We also donate money to lymphoma and leukemia society via relatives that participate in Team in Training.
    5. Misc. other donations throught the year to other charities and school fundraisers.

    As to why – it just seems right. Hopefully what little we can give will be that extra little bit to save a life or reach a cure.

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  7. Hesla says:

    Once a year I travel to a 3rd world country and donate my time to do eye examinations in rural areas. I pay my own way down, as well as bring my own equipment. There is usually a non-profit inovlved that you pay a certain amount to as well, which covers your accomdation, food and travel. For instance it cost me approx. $3200 to fly round trip to Tanzania, and pay the non-profit for what i mentioned above, for a two week eye-care mission.

    The benefit to this is that i see first hand if my money is going to good use. I also get the added benefit of traveling to a place i have never been and meeting the people off-resort and out of the major cities (eg. the Masai people of Eastern Africa).

    My specfic skill (Optometrist) allows me to do this, however anyone can go…. Building houses in central america for instance.

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  8. Hesla says:

    Once a year I travel to a 3rd world country and donate my time to do eye examinations in rural areas. I pay my own way down, as well as bring my own equipment. There is usually a non-profit inovlved that you pay a certain amount to as well, which covers your accomdation, food and travel. For instance it cost me approx. $3200 to fly round trip to Tanzania, and pay the non-profit for what i mentioned above, for a two week eye-care mission.

    The benefit to this is that i see first hand if my money is going to good use. I also get the added benefit of traveling to a place i have never been and meeting the people off-resort and out of the major cities (eg. the Masai people of Eastern Africa).

    My specfic skill (Optometrist) allows me to do this, however anyone can go…. Building houses in central america for instance.

    Thumb up 1 Thumb down 0