How To Make A Giving Plan
7 Steps To Increase Your Giving Impact
Charitable giving plans aren’t just for rich people. Even the smallest donations have the power to change lives and disrupt systems of injustice. But with so many options, urgent needs, and issues you care about it can be hard to know where you’ll have the most impact. A giving plan can help.
Here’s how.
What is a giving plan and why should you have one?
Many of us have a personal budget to help us manage our household spending. A giving plan supports you to manage your charitable spending. A giving plan connects your values, priorities, and budget to help you become more intentional in supporting the causes you are passionate about. The more deliberate you are, the more effective and impactful your giving will be.
Be proactive and stop feeling guilt-tripped
Having a giving plan helps you stay on track with planned giving and decide when to donate to one-off requests (aka reactionary giving). Reactionary giving includes anything from disaster relief to crowdfunding requests (think: a friend’s unexpected medical emergency) to donating your change at the supermarket checkout. When you are put on the spot to donate, it can feel awkward to say no. Having a giving plan can help you navigate those in-the-moment requests. If the request isn’t right for you, a giving plan provides you an easy out by explaining how the request doesn’t fit your giving priorities or how you are supporting the cause in other ways.
Increase your impact
When you have a long-term giving plan, you can look at the big picture, curate a list of organizations tackling the issues you care about from different approaches, and commit to them over a number of years. Consistent funding allows nonprofit and social change organizations to plan for the future and be bold in their approaches to solving the world’s problems. By developing a long-term relationship and more deeply engaging with a handful of organizations, you become an ambassador for those organizations and causes and learn how to advocate on their behalf. A giving plan also enables you to look for opportunities to leverage your giving. For example, watch for matching-gift programs that can double your donation or a chance to amplify an organization’s work to get others to join in.
Cultivate an abundance mindset
Sometimes we approach our budget from a scarcity mindset. We believe that we don’t have enough to give or that once we start making a bit more money, we can start giving. Other times, we think that if we only have a small amount to give, it won’t make a difference, or it will be embarrassing to appear stingy, so we decide not to give at all. But even small donations can have a big impact when others join in. A $1 donation multiplied by millions of people equals millions of dollars to that cause. Cultivating an abundance mindset allows you to give more generously. Learn more in our How To Be More Generous guide.
7 steps to create a personalized giving plan
A giving plan should answer four basic questions: what, who, how much, and when to give each year. Your plan can be just a few sentences outlining your priorities and your budget, or it can include pages of details and spreadsheets.
1. Define what causes you are most passionate about.
It’s natural for us to care about some causes more than others. The issues you are most passionate about should form the foundation of your giving. Ask yourself these guiding questions to find out what causes resonate most deeply with you:
Are there causes that you get more excited about than others? For example, do you get animated when talking about certain issues? What causes do you tend to amplify on social media? What issues do you follow in the news?
Is there a population that you are most concerned about and care about supporting? For example: women and girls, LGBTQ+ people, immigrants, people living in poverty, or children.
Have you benefited from specific opportunities or privileges that you would like everyone to have access to? How could others gain access to those opportunities?
What are you most worried about: is there an issue that keeps you up at night or causes a visceral reaction every time you hear about it?
What three things would you most like to change in the world, or what three issues do you wish could be solved right now? Try to be as precise as possible. Take the time to reflect on how a specific change could come about or how to solve the exact problem.
What do you want your giving to accomplish over your lifetime? Even though your giving plan should only cover one year, thinking about your sustained engagement can help you see the bigger picture.
You will likely find some common themes in your answers that reveal a few causes you are most passionate about. Choosing one or two causes doesn’t mean you don’t care about other issues—it just means that you’re being intentional so that you can increase your impact while staying within your financial means.
2. Decide who and which types of work you want to fund.
Most of us focus on the issues and causes we care about when deciding where to donate and don’t spend much time thinking about what types of strategies different organizations employ while working on those issues. Nor do we think about the approaches that we are most interested in. For example, are you more interested in direct services or system change? Bottom-up or top-down approaches? Local, national, or global? Supporting small and lean organizations or large one-stop-shops? Do you want to sustain what’s tried and true or take a chance on an innovative approach? When thinking about strategies and approaches, it doesn’t have to be one or the other. Many organizations use multiple strategies to fulfill their missions. And many donors give to a mix of approaches to increase their impact.
Read our Making the Most of Your Monetary Donations guide to dive deeper on these questions and help you decide. The guide also offers a few simple ways to check up on a group before you donate to ensure your money is going to a worthy organization.
Explore our Learn and Take Action archive. Most of our guides recommend trusted organizations working on the issues you care about.
3. Figure out how much you can afford to give.
Remember, no donation is too small to matter. Whether you can afford to donate $100 or $10,000 a year, having a target in mind helps you make better giving decisions. Try setting aside money each month (think: a piggy bank, separate account, or virtual bucket) to ensure that it’s there when you are ready to make your donation.
There’s lots of advice on what percentage of your income you should donate. There is no right or wrong answer. However, we think some guidance is helpful. Here are a few rules of thumb that might work for you:
Give what you can. If you are financially insecure, saddled in debt, or have other economic constraints, start small and work toward an abundance mindset.
Give what you won’t miss. It’s unlikely that you will miss 1% of your income. Make small choices throughout the year to save instead of spend.
Give the average. Most Americans donate 2-6% of their annual income.
Give according to your faith. For example, giving 10% of your annual income to charity (aka tithing) is rooted in Judaism and Christianity. And Muslims practice Zakat, which requires giving away 2.5% of your net wealth each year.
Give 1% more than you did last year. Figure out how much you gave away to nonprofit/social justice causes last year and add 1%. Learn more in our How To Be More Generous guide.
Give more as your income increases. If you set a goal as a percentage of your income, your giving impact will increase as your income rises. Giving away 10% could cause economic hardship for a minimum wage earner, but it could be a drop in the bucket for a top earner.
Give what you don’t need. Some people feel a moral obligation only to keep what they truly need to live on sustainably and give the rest away.
You may be interested in signing a giving pledge to hold yourself accountable. Learn more about different giving pledges at Giving What We Can. And remember to reevaluate how much you can give every year. As your financial situation changes, so should your giving budget.
Side note: do you care if your donations are tax deductible?
Normally, if you take the standard deduction on your federal income tax returns, you won’t get a tax break from your charitable donations. Currently, about 9 out of 10 taxpayers take the standard deduction. If you plan to itemize your donations on your taxes, then planning in advance is especially helpful. If you work with a financial adviser, they can also help you set a plan based on your budget, priorities, and tax law. Keep in mind, however, that you may find organizations you care about that are not tax deductible - for example, advocacy or political organizations and social enterprises. Depending on the impact you’re hoping to make, this is an important consideration in your giving plan.
4. Choose when you are going to make your donations.
One-time or recurring? If you can afford to set up a recurring donation, consider doing so. Recurring donations provide the nonprofit with a reliable source of income and provide you with an opportunity to stay engaged with a cause you care about. That said, an organization will be just as happy to receive your annual $180 donation as they are to receive $15 monthly.
During a fundraiser? Organizations hold different types of fundraising campaigns throughout the year to remind donors to give annually. They use membership drives, fundraising events, galas, Giving Tuesday, and year-end giving campaigns. If you plan to give during a fundraiser, watch out for matching donor programs that could double or triple your impact!
At the end of the year? The holiday season is filled with donation requests, from Giving Tuesday to year-end giving campaigns to Salvation Army buckets outside stores. Some people focus on year-end giving to maximize their tax breaks or because their annual bonus impacts their giving.
Legacy planning Do you know how you want to split your assets between your loved ones and the causes you are passionate about upon your death? Although it may be uncomfortable to think about, having a plan ensures that your assets are distributed according to your wishes.
5. Create a strategy.
Now that you know what causes you want to donate to, who and which types of work you want to fund, how much you can give, and when you plan to give, you can pull it all together to create a strategy. Based on everything you’ve learned in steps 1-4, you may find it helpful to divide the total amount into buckets to build space for flexibility. Your buckets could include:
Priority giving: This should be your biggest bucket. It is based on the passions you identified in Step 1. You may also find it useful to create different percentages for the different strategies and approaches you are interested in based on Step 2. For example, giving 30% locally, 20% nationally, and 50% globally. Or, 60% to systems change and 40% to direct services.
Obligatory giving: Don’t forget about things like school fundraisers or the donation plate at your place of worship that may be outside of your priority areas.
Reactionary giving: While a giving plan helps you focus your priorities, setting aside some of your giving budget for asks from friends and family and other unanticipated events can help you from feeling guilt-tripped. These funds can also be used for emergencies (think: natural disaster) or urgent calls to action (think: organizing against abortion bans) so that you can help save lives and have an immediate impact when the time comes.
If you have kids: Studies show that the spirit of giving is passed down from generation to generation. Consider setting aside part of your donation budget to decide upon as a family or, to build a foundation of giving, let your kids make some giving decisions based on what’s important to them.
6. Include other types of giving.
Monetary donations aren’t the only way to give. Consider what you have in the areas of time, talent, treasure, and testimony to round out your giving plan.
Time and talent (aka volunteer): Volunteering can be a great way to support the causes you are most passionate about and give back to your community. Think about how much time you have, when, and where you want to volunteer. Learn more in our How To Volunteer guide.
Treasure (aka donate tangible items): Use spring cleaning as an opportunity to give away things you no longer use. Make a plan to donate uneaten party leftovers to a food rescue program. Participate in an annual toy drive. Donating tangible goods can be a great way to give back. But did you know donating items can sometimes do more harm than good? Learn more in our How To Donate Goods guide.
Testimony (aka amplify good work): Become an ambassador for the causes and organizations you support by using your voice or your platform to spread awareness and share their calls to action. Sign up for their newsletters and action alerts to stay up-to-date on how you can help. Encourage your friends and family to join you by letting them know which actions you are taking and inviting them to take action too.
7. Write it down and revisit it on an annual basis.
No matter the level of detail your plan has, make sure to write it down. Writing it down helps you stay on track and hold yourself accountable. It also allows you to review your plan at the end of the year to see how you did and evaluate where you want to make adjustments the following year.
Make a difference on the issues you care about.
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Originally published December 28, 2021.
Guides identify both fast actions that you can take in under five minutes and more time-intensive actions that deepen your engagement. Our fast actions tend to be time-bound, as a result, some guides in the archive may contain expired links. Not to fret, we also recommend anytime actions that never go out of date.