5 Essential Steps to Master Charitable Planning Like a Pro

There’s no shortage of public charities and private foundations that would benefit from your generosity. Many people with ample financial resources want to make a difference. But the big question is, how do you ensure that your charitable gift is making the impact you desire? How can you allocate your financial planning resources to the causes that resonate with your charitable goals?

The answer lies in charitable planning with intention, rather than making reactive decisions.

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The Benefits of Charitable Planning Strategies

Let’s face it, your mailbox is likely brimming with gift requests from a wide range of public charities and private foundations. These solicitations are designed to engage you on an emotional level.

However, yielding to every appeal can create budget and tax issues. You risk exceeding your budget or unintentionally running short on funds for a cause that’s especially dear to you. And keeping track of your charitable deductions for tax savings can become a logistical challenge. 

And the worst-case scenario? Falling into the trap of a scam.

That’s why being intentional through careful donation planning is your safest and most effective route for impactful giving. Creating a well-thought-out plan for your charitable contributions is more than just a good idea; it’s a necessity. Doing so has several advantages, allowing you to:

• Harmonize your philanthropic goals
• Maintain a budget that’s mindful of your taxable income
• Supercharge your contributions to causes that fulfill your charitable goals

As a bonus, you can confidently toss out that endless stack of solicitation mail without a second thought.

5 Steps to Charitable Planning

Whether giving cash, real property, or other items such as your no-longer-needed work clothes, these 5 steps to charitable planning will help ensure that your money is going to the organizations and causes you care about the most. 

1. Identify Your Favorite Charities

The first step in your charitable planning strategy is to create a “maybe” list of organizations you’re considering supporting. Jot down the names of public charities or private foundations you’re already passionate about. 

Additionally, collect all the mailers you receive over a month and add them to a dedicated pile. By the end of the month, sift through this pile and add any new names to your list. Consolidate this list in a single location—an Excel or Google spreadsheet works great for this, especially as you move through the following steps.

2. Vet with Careful Planning and Research

The aim here is to refine your “maybe” list into a group of favorite charities that align with your charitable goals. Take your list and do your homework. Consult with trusted friends or online communities and use resources like Charity Navigator to gauge the credibility of each organization. Any organization that doesn’t pass muster should be removed from your list.

3. Establish Your Charitable Giving Budget

Deciding on your annual budget for charitable gift contributions is a deeply personal matter. It involves balancing your taxable income, expenses, and other financial considerations. 

A few years ago, my husband and I took the step of setting up a charitable giving fund. We contributed an amount roughly equivalent to what we expected to donate over the next decade. Given our financial situation at the time, this approach made sense for us. 

But remember, everyone’s circumstances are unique. It’s crucial to consult with your accountant or financial advisor to arrive at a budget that aligns with your own financial landscape.

4. Allocate Your Charitable Contributions Budget

Once you have a budget, the next step is to allocate it. Use a spreadsheet to list all your approved organizations and assign an estimated cash gift amount to each. Tweak these numbers until your total allocation matches your budget. Remember, you can always defer a contribution to one organization to a later payment period.

Pro Tip: Categorize your approved organizations (e.g., health, animals, children) to make the allocation process smoother. Also, consider the trade-offs. If you have multiple organizations in the same category, you might choose to support one now and another later.

5. Schedule and Execute Your Charitable Giving Experience

The final step is to actually make your contributions. Block out time on your calendar, just as you would for a doctor’s appointment, to sit down and write checks or make online donations. Record the date, amount, and method of each contribution in your spreadsheet for recording charitable deductions at tax time.

You can execute this charitable planning process annually, bi-annually, or at any frequency that suits you best. The beauty of this approach is its flexibility, allowing you to tailor it to your own needs and philanthropic goals.

Wrapping Up: Elevate Your Charitable Planning Experience with Intention

By adopting a structured approach to your charitable contributions, you’re not just giving—you’re giving with purpose. Careful planning ensures you’re adhering to your budget, sidestepping scams, and wholeheartedly supporting organizations that align with your charitable goals.

While it’s crucial to stick to a charitable planning strategy, remember that life is fluid. Your list of favorite charities may evolve and your budget could change. The beauty of this approach is its built-in flexibility, allowing you to adapt your contributions as your financial circumstances or philanthropic goals shift.

Charitable planning isn’t just about opening your wallet; it’s about opening your heart and mind to make a meaningful impact. So go ahead and discard those solicitation mailers without a second thought. You’re now contributing not just with a generous heart, but with a focused and intentional mindset!