Smart guide to charitable giving

(Linda Stern is a freelance writer. Any opinions in the column are hers. You can follow Linda Stern's financial notes on Twitter at

WASHINGTON (Reuters) - Americans are as charitable as ever, but they are changing the way they give money.

Think of the record-setting donations -- many of them texted by cellphone -- after the earthquake in Haiti at the beginning of this year. Or the number of spring races and athletic events held to benefit one (often personalized) charity or another.

Fidelity just reported that its Charitable Gift Fund, which allows investors to set up their own private charitable funds, had its biggest first quarter ever in the first quarter of 2010, with $270 million in new contributions, more than double the level from the first quarter of 2009. (Typically the fourth quarter of the year is the fund’s biggest, with year-end tax motivated giving swelling contributions.)

It’s good that people are coming out of the recession with their generous impulses intact, and it’s good that people are thinking of new and innovative ways to give. But too much of the charitable impulse is still just that -- an impulse -- and can result in too much junk mail and too little impact.

This is a great time of year to plot your charitable strategy for the rest of 2010. That way you’ll not be simply reactive in your giving. And you won’t have to rush around in the month between Thanksgiving and Christmas trying to do a year’s worth of good works.

-- Focus. Give bigger gifts to fewer charities. This enables your gifts to have a larger impact, and it also allows you to escape the problem of getting too many solicitations from too many groups. Difficult as it might be, try to choose one main cause from each of two or three categories. For example: one main medical charity, one arts organization, one social issue.

-- Segment. That isn’t to say you should shut down your niece or neighbor when they do their charitable walk/run/bike/silent auction. Just consider those obligatory donations as separate -- or a small part -- of your overall giving plan. You might set aside a certain amount for that category of giving.

-- Think through the organizations carefully. Consider size: The small, personal targeted organization can seem more responsive to changing needs, and have less bulky overhead. But a big group has more resources to put your gift to work.

Consider mission: Some charities do good work, but may have a focus you disagree with. One of the most publicized recent cases is the Catholic Charities. That group runs many worthy social service programs. But it causes problems for some when its religious stance against same-sex unions conflicts with its activities. It has limited its adoption work and its own workers benefits when they have conflicted with that stance.

Consider management: Use ( to see how a particular charitable group compares in terms of its money management and efficiency. Once you've done all this homework and figured out which groups seem to fit you best, you can just put your giving on autopilot and not have to worry about it all the time.

-- Consider the charitable gift funds. Major mutual fund companies Fidelity (, T. Rowe Price (here) and Charles Schwab ( all run charitable gift mutual funds. They work like this: Your contributions to the fund are tax deductible, and the money in it is invested and builds up until you decide where to donate it. You can make automatic, regular contributions and then use the funds to contribute to any bona fide charities of your choice. You could even contribute money annually but let it grow for a few years and then give a really big gift. You can give your account a name, like the Smith Family Charitable Fund, and have regular family meetings to discuss the best ways to use it.

-- Give local. Community Foundations (there's probably one near you, find it at the Council on Foundations) are conduits for all sorts of local giving. You can bolster the profile of your local area on such issues as housing, education, the arts, by giving through your community foundation. You can also set up your own family fund through your local community foundation.