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How to Give Away Your Money The Right Way

As a financial counselor, I’ve spent more than 20 years telling people how to save and spend their money. Today, I want to tell you how to give it away.

I’m referring to charitable donations. Most of that happens during the holidays, but now that we’re past that, I want to stress the importance of charity during the rest of the year.

Charities refer to October, November, and December as the “Giving Season.” The National Center for Charitable Statistics reports that more than half of all charities receive more than a quarter of all their yearly donations during the Giving Season.

The NCCS offers two other fascinating stats:

  1. The nation’s charities, as a group, received 72 percent of all their donations from individuals.
  2. Americans who make $1 million to $1.5 million a year donate 2.8 percent of their income to charity. That pales in comparison to those who earn $45,000 to $50,000, who donate 4 percent of their income.

It’s quite obvious charities need average Americans to donate year round. However, if those Americans can barely make ends meet themselves, should they be donating at all?

While I can’t answer such a personal question for you, I can tell you how to be financially responsible if and when you choose to give money to charity. Let’s take a closer look…

1. Don’t donate over the phone

Never donate based on an unsolicited call. Almost always, the voice on the other end isn’t from the charity itself, but from a company hired to raise money — and it takes a cut. Better to donate directly to the charity and cut out the middleman.

In some instances, these firms are identity thieves trying to acquire your personal information for nefarious purposes. If you receive a call asking for a donation, ask for a website address you can review at your leisure. If they refuse, say “No, thanks” and hang up.

2. Have a charity plan

Frugal shoppers know never to go grocery shopping without a list. Otherwise, they’re likely to spend impulsively on items they don’t need and may not even eat.

The same strategy applies to charitable giving. Whatever you decide to donate will go further if you focus your efforts on causes that move you.

Are you a pet owner who wants to fight animal abuse? Are you a music lover who’s upset that music classes have been cut back in schools? Has someone close to you survived breast cancer?

If you’ve ever invested in the stock market, you’ve heard the word diversification. The last thing you want to do is invest all your money in a single stock that could drop quickly and cost you everything.

However, when it comes to charitable giving, putting all your eggs in one basket is the best tactic. Why? Because your dollar will be focused on a single cause and make a more noticeable difference.

3. Donate locally

I follow the advice above and donate most heavily to a cause I feel passionate about: Junior Achievement, a nearly century-old youth organization that teaches financial literacy — a topic obviously dear to me.

Best of all, Junior Achievement has chapters across the country, and I work closely with the one near me. I’ve gotten to know the staff and the children, and I’ve watched them grow into fiscally responsible adults who will have the resources to raise their own families in a safe and loving environment.

Seeing my donations in action is really fulfilling, and working with other donors on a cause is truly motivating.

4. Check out those charities

Horror stories abound about charities that spend nearly all their donations on staff and give very little to the cause. There’s even a list called America’s Worst Charities that was updated just last month, which is a collaboration between the Tampa Bay Times and the Center for Investigative Reporting.

The easiest way to ensure your charity is doing its job is to consult a wonderful website called Charity Navigator. You can search a charity’s name and learn more about it. For instance, I typed in “Junior Achievement,” and the first result was the Rocky Mountain chapter, which has a four-star rating — the best possible.

5. Time is money

Of course, if you’re in debt, I don’t advise you donate money to a charity. You are your own charity until you pay off those high-interest credit card bills. If you’re in the midst of doing that — or if you want to start, call at 800-810-0989 for a free consultation — best to volunteer your time.

Many local charities would love to have a hard-working, reliable volunteer to help with a myriad of tasks. As someone who has done that, I can tell you: As busy as we all are, one less hour in front of the TV is rewarding when you volunteer.

Howard Dvorkin is a CPA and chairman of, an educational resource for those who want to conquer all forms of debt in their lives.

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