If you’re anything like me, you’re probably bombarded this time of year with requests from charities for donations. Whether it’s the Salvation Army ringing bells at the local department store or calls from your alma mater guilt tripping you into donating to the school or your local church sending you emails with a 2013 budget update, requests for charity are all around at this time of year. Now don’t get me wrong – I’m all for donating a portion of your income to charity; I think it’s a great idea. But before you go writing those checks, here are a couple of things to consider:

1) Tax deductions. Charities will often use this as a big selling point, especially at year’s end. “Maximize your tax deductions in 2013…the end of 2013 is coming; donate to charity instead of the government.” Please see my post on taxes for more info, but basically, for most of us, this will be a moot point. When it comes tax time, there are two different methods of calculating your total net income. You can either itemize all your deductions (charitable, mortgage expenses, any medical expenses) or take a standard deduction ($6,100 in 2013). For most of us, the total of all our itemized deductions won’t be greater than $6,100, so we’ll just take the standardized deduction when calculating our taxes. Therefore, our charitable deductions won’t really come into play. So don’t fall into the trap of thinking that by donating more to charity that you’ll automatically save on your taxes, because most of us won’t.

2) All charities aren’t created equally. Although all charities will have been approved by the IRS (Internal Revenue Service) as a not-for-profit institution, your money won’t go as far in some charities as it will in others. Check out Charity Navigators  and prepare for your mind to be blown. I checked on the 10 ten “worst charities” and found the Firefighters charitable foundation. Now, if any of us got a call from this charity, our hearts would certainly be drawn towards them. Who could say no to helping firefighters? Well, once you see how effective they really are, you probably wouldn’t give to them. According to Charity Navigators, only 7% of all the funds you give to them help their stated mission. The other 83% goes to fundraising expenses and admin costs. Wow. Then check out Teach for America. Almost 83% of the money given to TFA goes to its stated mission. Quite a difference. Be smart with your donations and make sure it’s going as far as it possibly can.

3) With any expense, make sure it’s in the budget. What does a contribution to the Red Cross have to do with buying a cup of coffee at Dunkin Donuts? They both need to be in your budget before making the purchase/donation. I know, I know – how can I be so critical? Have I no heart? I love giving to charity just as much as you do, and my heart goes out to those in need. What I don’t condone, though, is over-giving, just like I don’t condone overspending. I guess if I had to recommend one over the other it’d be over-giving, but it’s still not ideal. You need to make sure your own financial house is in order before going to help others. Just like on airplane flights when they instruct you to “secure your own oxygen mask before assisting others.” As 2013 draws to an end, sit down and have a little H2H (heart to heart) with yourself and figure out an appropriate amount that you can afford to give. Those charities aren’t going anywhere, and will still be there in 2014.

The holidays are always a special time of year. We are so blessed and have more than we need. Please do consider giving back to your community to your charity of choice.

Thanks for reading! Here are some others you might enjoy:

Taxes FAQ

What to do with the year end bonus