Wes Moss: Some guidelines for charitable giving

Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here weekly.

Wes Moss hosts 'Money Matters' Sunday mornings on AM750 and 95.5FM News/Talk WSB.

Georgians are incredibly generous. We give about $4.8 billion to charity every year. While much of that comes from major philanthropists and foundations, state residents give an average of $3,396 a year to worthy causes. That’s an average of 6.2 percent of our discretionary income — comparing very favorably with the 3.2 percent national average.

Giving makes us feel good — like we’re part of something bigger than ourselves, something that might outlast us. For wealthy families, giving can also be an important part of tax and estate planning strategy.

Making a smart charitable contribution is a lot like planning for retirement. Some tips from Georgia-based philanthropic advisor Eileen Snow Price:

• Clarify your values: What causes and issues are important to you. Who do you want to help? What type of organization is best suited to administer that help? A church group? National charity? Local? Be specific.

• Know your limits: Figure out how much you can really afford to donate. NetworkforGood’s calculator can help you settle on an amount.

• Share more than money: There are three ways to support your favorite cause: money, time and wisdom. If you really want to make an impact and feel good about your efforts, give at least two of these things to your chosen charity.

• Screen for best value: Sites like CharityNavigator and CharityWatch provide efficiency ratings and background on hundreds of charities, (though one must be a paid member to access CharityWatch’s ratings). Look closely at an organization’s program expenses — the higher this percentage, the better. A charity that spends 70 percent on program expenses is spending 30 percent of your donation on overhead and fundraising expenses. A charity with a 98.5 percent ratio for program expenses is doing a fantastic job of converting donations into action.

If you are considering an extremely large donation — the bulk of your estate, for example — consider hiring a philanthropic advisor, someone like Price who gives away money professionally.

• Stay the course: Once you find the right charity, stick with it. Commit to supporting the cause on a continuing basis. Think of it as an investment, not a gift. Be patient and you’ll see that investment pay all sorts of dividends for both the community — and you.

What other guidelines would you suggest?

– Wes Moss, for AJC Atlanta Bargain Hunter blog

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