How To Make Strategic & Impactful Donations, According To A Personal Finance Expert

Over the last month, our social media feeds have been full of actionable information on ways to aid the Black Lives Matter movement. Posts include facts about systemic racism and actions to take, like marching, signing petitions, calling our elected officials, and of course, donating money. It's essential for these alerts to be shared widely for causes, from bail funds to non-profit organizations to GoFundMe campaigns, but choosing where to start donating can also be overwhelming.

Given the way we've adapted to use social media, scrolling quickly through feeds and stories, it may be tempting to throw a bit of money at every cause you come across or simply move on without sharing a cent, but neither of these paths is the most effective. Making impactful donations does take some strategy, especially if you're working on a budget, as so many of us are. For advice on how to get our money to make a real difference in the world, we spoke to Patrice Washington, personal finance expert and host of the Redefining Wealth Podcast where she teaches the masses how to live their life's purpose, find fulfillment, and earn more without chasing money.

If you've been overwhelmed by both the sheer number of issues our society is facing right now and the number of organizations that are working to solve them, you're definitely not alone. Washington says the key to finding organizations to contribute is to think about who you are and the causes that resonate most with your values. From there, it's time to put in the research. "I've always believed that even with the best of intentions, we shouldn't invest in anything we don't truly understand," Washington tells Refinery29. That means it's vital to read up on the issues that spark the most passion in you and devote time to getting a full picture of what contributes to the issue, its effects, how it might best be tackled, and what organizations are doing that work.

During this period when more people than ever before are recognizing how vital the Black Lives Matter movement is, it's worth considering how the causes you care about intersect with the movement. "I think we all have a role to play in moving the BLM movement forward. We should line up our giving with the causes that are near and dear to our heart, but particularly geared towards those that benefit Black organizations," Washington explains. 

To illustrate this point, the personal finance expert shared an example of how she's applied this giving practice in her own like. "In my work, I'm known for talking about the intersectionality of mental health and money, particularly how childhood trauma can allow the most brilliant of us to self-sabotage our career or financial success," she says. "While there are many opportunities to give popping up all around us — all well-deserving in their own right — I focus my giving on the Therapy Fund, an initiative of The Loveland Foundation, to provide financial assistance to Black women and girls nationally seeking therapy."

Once you've landed on a cause you care about — and hopefully looked into ways the cause converges with BLM — it's important to check the credibility of the organizations that support that cause before donating. According to Washington, this step can be complicated since new organizations are being created all the time. There are charity ranking sites that you can check out, like Charity Navigator and GuideStar. However, just because an organization isn't listed on these sites doesn't necessarily mean it isn't worth donating to. 

"Many [new organizations] are committed to doing work on the ground and not necessarily submitting applications to be listed in charity ranking sites," Washington explains. "Unfortunately, that means that most organizations listed are larger with bigger budgets. So while they appear more credible on paper, less of the donations go to the actual work." That's something that should be considered when scrolling through these ranking sites. "I keep this in mind before writing off small organizations with strong leaders. Without our investment, they'll never be able to keep up, scale, and create the impact we all desire," she says. If you don't find an organization on a ranking site, do some more digging. Read up on the organization's leaders and how exactly funds are used, and don't be afraid to call and ask questions. 

Setting up a recurring donation is an extremely effective way to support the organizations that you've identified as credible and in-line with your beliefs. Washington even goes as far as to say that "recurring donations are the only way for us to truly commit to a cause." That is especially true for the BLM movement. "When it comes to BLM, we can't afford to be drive-by supporters," she says. "We need to be life-long supporters if we're going to see the fruits of our collective effort."

You should also try to make your recurring donations as substantial as your budget allows by choosing one or two key organizations because small amounts spread all over don't make as big of an impact. "Giving less money to more organizations creates unnecessary administration costs to smaller organizations that could use those funds to actually do the work," the expert explains. "Campaigns that say every little bit helps might mean well, but in reality, they prevent people from actually contributing meaningfully in an effort to make people feel like they've done something significant. If the contribution is about getting results, we need as much of that money as possible to go to the execution of the work so giving more to fewer organizations is always going to have a greater impact in my book."

When it comes to working those recurring donations into your budget, Washington says, "it's a choice that people just have to make." She points out that prioritizing giving as part of your budget will come more easily when you're supporting a cause you truly believe in, which is why the process of identifying organizations we've discussed here is so important. 

One tactic she recommends when giving is to do it before you pay your monthly bills instead of after. "If we wait until it's completely convenient, we'll never understand the magnitude of our giving," the expert shares. She also suggests looking at the money you donate as a percentage of your income instead of an independent dollar amount. This will allow your capacity to give to grow as your income does. If you don't do that, Washington explains, "you'll end up a part of the statistics which imply that the more your income grows, the less likely you are to give. That only happens when it's not a priority on the budget to begin with."