How To Fit Giving Into Your Budget — No Matter How Much Money You Make

We all have a lot of competing financial responsibilities. Sometimes, it can feel like too many.

Feeling like a financially-responsible adult — one who has their debt handled, who knows how to responsibly wield a credit card, and who saves money (and leverages interest) every month — sometimes sounds more like fiction than an attainable reality. This is especially true for those living in an expensive city and struggling to find their professional footing. And, amid all of these opposing financial forces, it’s no surprise that charitable giving easily falls between the cracks.

Giving and participating in philanthropy is often regarded as an activity reserved for the wealthy. “This is a conventional narrative, but it’s not the whole story,” says Andrea Pactor, interim director at the Women’s Philanthropy Institute. “The reality is that people donate their time, talent, treasure, and testimony in many ways, every day, in all communities across income, race, gender, sexual preference,” Pactor says. “And sometimes people don’t recognize that what they’re doing really is what we call voluntary action for the public good.”

Millennials face a myriad of economic challenges and as a result they don't give all that much money to charity, but at the same time they are transforming the way society understands philanthropy. By and large, millennials prefer to donate clothes, food, goods, and their time instead of cash. When they do donate funds, phenomena like online giving — made easy through platforms like Facebook’s charitable giving tool or Amazon Smile — have played a huge role. Today, millennials account for 33% of donors on crowdfunding sites like GoFundMe or YouCaring.

According to Emily Green, a financial advisor at Ellevest, when it comes to giving, millennials are more concerned with making an impact than with the number of zeroes in a donation. “They not only think of it as charitable giving but have really been the driving force of spending with mission-driven companies,” Green says. “More than any other generation, they want to understand the impact every dollar has, whether it is philanthropy, spending, or investing.” So, how can we begin to rethink our relationships to philanthropy and build giving into our spending habits?

One of Pactor’s chief priorities at the Women’s Philanthropy Institute is to raise awareness that society depends on civic engagement and philanthropy that engages and helps others. This, Pactor says, begins with identifying a cause or issue that you feel passionately about and can commit to supporting for the long haul. “It doesn’t matter whether it's health care or education, or care for animals — it’s about being passionate is the first place. Then you have to turn that passion into action.”

Pactor notes that, often, philanthropy begins modestly, with activities such as volunteering. According to the Institute’s research, volunteering regularly leads to giving on a regular basis. And, while giving regularly may sound like it could put more strain on your bank account, Pactor says this doesn’t have to be the case. Her solution? A giving plan.

She suggests beginning by writing down your values and the issues you care about, as well as what you’re already giving — whether it’s a Facebook fundraiser for a friend’s birthday or a box of Girl Scouts cookies. From there, you may need to identify some additional organizations or initiatives that align with what you care about.

Next, it’s time to figure out how you’d like to give, whether of your time, talents, or money, and how much you can afford. In order to stay within your giving budget, Pactor recommends adhering to the 80-20 rule: “80% of your giving should go to the things you’re personally passionate about." and "the other 20% can be allocated to all those requests from friends to support their causes,” Pactor explains. “Once that's spent you can more easily say: I value what you’re doing but I have a giving plan and you got to me too late in the year — but I’d like to consider that for next year.”

A giving plan also affords us permission to say no — which, for women especially, can sometimes be a challenge. With a clearly organized structure, we are given permission to turn some things down without feeling bad about it.

Green also believes that developing a financial plan with a portion dedicated to charitable giving is important. Many of Green’s clients have had concerns about how giving can work within a budget, to which Green says: "Plan, plan, plan." According to her, this could mean setting an amount for yourself to give within a timeframe.

Pactor believes that women are better able to understand how we can leverage our money putting us in a better position to step into our role as philanthropists. “We’re good at talking about the pair of shoes or a sweater we bought on sale, we’re less good at talking about how much we give,” she says, though she adds that there is no such thing as a “right” way to give.

The most important piece, she reiterates, is making sure that you give to a cause that you care deeply about, and to give an amount that fits within your financial plan. “The answer isn’t give until it hurts, it’s about making a gift meaningful for you,” Pactor says. Today, giving what we can to help others is not only a nice thing to do, it’s necessary. But this does not mean we have to over-extend ourselves; the balance lies in finding ways to create the most impact with what we have, which is also dictated by how we spend and consume in our daily lives.

“If you are giving to an organization that supports clean energy, you don't want to be spending or investing your money in a way that is supporting the exact opposite,” Green notes. Ultimately, whether we are donating, spending, or investing, we all have the power to make an impact by identifying and supporting causes that are making the world better — and committing to give what we can on a regular basis. After all, we must remember, Green says, that “at any wealth level, we can all make a difference through giving.”