Budget for regular charitable donations, and your giving will become so much more intentional—and more consistent.

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How to budget for charitable giving: saving for donations
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If you’re getting serious about your charitable donations and commitment to charitable giving, one of the easiest ways to make it a habit is to incorporate donating to charity into your budget. Whether that means setting money aside at the beginning of the year or as part of your monthly expenses, planning for your charitable donations in advance usually makes for more intentional giving. (You can even give a gift while donating to a worthy cause at the same time with gifts that give back.)

How much you donate is up to you, but if you plan for it, you’re more likely to follow through on those good intentions. Here’s how to make giving back part of your financial plan.

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How to budget for charitable giving

A common rule of thumb for budgeting for charitable donations uses the concept of the 50/30/20 split for your budget. Texas-based financial coach Kristine Stevenson Seale explains that this arrangement designates 50 percent of your take home pay for needs such as housing, electricity and food. The other portion is for your wants: About 30 percent of your budget goes into this category, which might include vacations, gifts, or date nights. The final portion of your income, about 20 percent, is set aside for savings and for paying down any existing debts.

Stevenson Seale says that most people adhering to this budgeting concept will set a portion of the money in their 30 percent “wants” category aside for charitable giving, often aiming for 10 percent of their income.

Jason Ball, a certified financial planner, says that while the 50/30/20 split is ideal, most Americans fall short.

“So plan to give, but realize that to the average American family the 50/30/20 is simply impossible and, in fact, it may be more of an 80/15/5 scenario,” he says.

In that case, charitable giving might come from your wants or wishes category (either the 15 or 5 percent category), as Ball describes them. Try to find a balance you’re comfortable with: You want to donate without completely derailing your own savings efforts. It’s also nice to have some flexibility, so when unexpected tragedies occur—think the coronavirus crisis or a natural disaster—you have some wiggle room to direct extra donations to relief efforts.

Deciding which organizations to give to

Once you’ve designated a sum of money you’re willing to donate with some regularity (typically monthly or annually), the difficult part usually comes when you have to find those charities that align with your values and can be trusted to spend your money wisely.

This can be challenging, which is why it’s usually best left up to the experts. Sites such as Charity Navigator are a good starting point: The site has rated more than 9,100 charities across the U.S. and offers a detailed breakdown on how they measure up in terms of financial health and their transparency about how funds are spent. That kind of data comes from combing through tax forms and annual reports, but you can also get a feel for a charitable organization on your own by reading newspaper articles on the charity’s history and recent projects.

“We recommend that donors pick up the phone and get a chance to actually talk to someone at the charity,” says Ashley Post, a communications manager with Charity Navigator.

If you have a good bit of money to donate, wealth advisor Jason Katz suggests looking for charities that align with your personal values and beliefs. Once you have a list, break down the amount you have to donate into smaller portions.

“We like to advise our clients to follow the 50/30/20 rule: give 50 percent of the funds available to organizations that support causes you are passionate about; 30 percent to organizations where you have a loyalty or obligation (think alumni associations or religious groups); and 20 percent to unplanned requests that might come up,” Katz says.

This model makes it easy to budget for consistent donations, while also having flexibility for last-minute asks from neighbors and friends: That 20 percent can be used for the spaghetti dinner fundraiser for a coworker with cancer or a relief fund for essential workers during the coronavirus crisis without tapping into the monthly donations you give to your local homeless shelter.

However you decide to budget, don’t stress. What’s most important is that you’re making thoughtful charitable donations in the first place: Figuring out how to budget for that charitable giving is just your strategic approach to that mission.

“Bottom line? Give with a cheerful heart,” Stevenson Seale says. “Giving is for the giver; it makes us better people.”