How to create a giving plan

The end of the year is upon us. While you're recovering from the holidays, take a moment to tie up some last minute financial loose ends that will put you in good shape at tax time.

I usually make most of my charitable donations in February or March while I'm working on my taxes. That's when I say, "I only gave that much last year?" And I decide to do better starting immediately. This year, I decided to send that wave of donations before the end of the year. As usual, my spouse didn't want to start writing checks at random. He wanted to refine our giving plan first.

What's a giving plan? It's a clear map of how you intend to use donations of money, time, and other things to strengthen your community according to your values. Here's a step-by-step guide.

Somehow, carve out a couple hours to talk about this, if there is more than one of you who has to give input. We did ours in the car on the way home from spending Xmas with my sister's family. The kid was asleep in the back seat, and we had nothing else to do.

First, we made a list of types of causes we want to support. The list could be as specific or as general as you want. It could contain things like environmental groups, education, prison reform, religious groups, animal rights, disaster relief, AIDS, or whatever moves you. (See this post for our list of categories.)

Then, we read through the list, and we each ranked each category to determine how important it was. We used a 1-5 ranking system, where 1 was something we definitely wanted to support, and 5 was something we could support later when we had more money, or where we were happy with in-kind donations of time, etc, that we are already making. It was useful to see which things are really important to both of us, and which things one of us cares more about.

Using these numbers, we identified a handful of causes that are critically important to both of us. This was our "First Tier". We also made a "Second Tier", a list of causes that one of us felt very strongly about, or that both of us thought was pretty important even if it was not a critical issue. The Third Tier we haven't dealt with yet, but we listed each category in the First and Second Tier and then matched them up with organizations we already give to. We then decided which ones we want to increase our donations to, and found some major holes where we need to find organizations that meet our requirements. We ended the meeting with a list of groups (with dollar amounts) that we plan to send money to this week, before the end of the year. And we also each had a list of groups or categories we are responsible for doing more research on.

Clear as mud? I hope so.

If you'd like to see our list of categories, visit this post.