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When most Americans consider giving, they do so based on
their annual income. Some churches ask members to give a fixed
percentage (often 10%) of their annual incomes in a program
of "tithing." However, because of investments and
inheritances, the true giving ability of many people is based
more on their accumulated wealth than on their income.
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FACTS
& FIGURES
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Giving
to international-relief groups rose 20.9% in 1999,
to $2.7 billion. Natural disasters and other catastrophes
fueled increased giving to many charities.
More Facts
& Figures
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STANDARDS FOR GIVING: WEALTH VS. INCOME
A new way of looking at how much you can afford to give
is to consider your overall wealth rather than annual income.
Financial expert Claude Rosenberg, Jr. and his Newtithing Group
in San Francisco are encouraging people to use the wealth standard.
Using that standard, Americans, especially those in the upper
income brackets, could afford to give far more generously than
they do now. In 1999 total giving by individuals in the United
States was more than $143 billion. Yet Newtithing estimates
the national capacity for additional giving was $244
billion a year.
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THE
EFFECTS OF INFLATION
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If
you donated...
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in...
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an
equivalent donation in 2000 would require...
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$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
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1999
1998
1990
1985
1980
1975
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$1,020
$1,036
$1,343
$1,620
$2,286
$3,513
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OR...
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If
in 2000 you donate...
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it
is equivalent to
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back
in...
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$1,000
$1,000
$1,000
$1,000
$1,000
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$
971
$ 803
$ 656
$ 517
$ 333
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1997
1990
1985
1980
1975
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Source:
Newtithing Group™, San Francisco |
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Even without more-generous donations, the actual amount of
charitable contributions should rise every year because of
inflation, a factor often forgotten by people who give a set
yearly amount. For example, contributions that totaled $1,000
in 1990 would have to total $1,343 to retain the same value
in 2000.
Setting Your Own Standard
Only you can decide what your personal giving standard
should be. The amount you donate should be something you can
really afford financially and psychologically after you have
budgeted for your living expenses, insurance, retirement savings,
and other goals you may have. However, it is important to
budget contributions just as you budget other expenses. If
contributions are not planned into your budget, they are likely
to fall short of your own expectations. Or - if you tend to
be a very generous person - your contributions could get out
of control.
One way to estimate what you can afford to give
each year is by using the standards set by the Newtithing
Group of San Francisco. Note that the result you receive is
only an estimate based on averages of all taxpayers in the
same income group.
(For a complete look at your individual giving potential,
visit the Newtithing table
of Affordable Donations.)
BUILD A BUDGET
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FACTS
& FIGURES
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In
Silicon Valley, there are approximately 64 new
millionaires every business day. If each of them
gave one percent of that wealth to charity, there
would be $3.2 million going into philanthropic
endeavors each week.
More Facts
& Figures
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Like the electric bill, planned giving is part of your budget.
It gives you guidelines for how much you can afford to give
and provides a plan to be executed. When a request for giving
falls outside your giving plan, it is easier to say no. Also,
as you construct a budget, you might ask yourself whether
you view giving as a mandate or an elective expense. And,
from a financial perspective, keep the benefits of planned
giving in mind.
(If you would like help constructing a basic
budget that includes charitable giving, visit About.com's
Basic
Budget Planner)
Next: Step 3 - How Should
You Give?
Guide
Home | Step 1 | Step 2 | Step
3 | Step 4 | Step
5 | Questions to Ask
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