If you haven't yet depleted your 2010 charitable giving budget, it's time to assess your funds, update your giving criteria, identify the organizations that best fit your criteria, and allocate your funds among those organizations.
Assessing Funds: My wife and I set our charitable giving funds as a fixed percentage of our annual household income, such that when our income increases (or heaven forbid, decreases), our dollar amount adjusts accordingly. In my experience, agreeing on a percentage of income before calculating the dollar amount can help ease sticker shock. And agreeing on a budget frees us up to spend more than we otherwise might.
Giving Criteria: During the last several years, we spent almost 100 percent of our discretionary* charitable funds on the causes I am passionate about in the developing world. Drawing on my experience managing a philanthropic fund at work, this year I suggested to my wife that we should target 20 percent of our discretionary funds on local causes. My wife lit up at the opportunity to direct funds in our own community; although she agrees with me that in theory funds can go farther in the developing world, like many people she gains greater satisfaction in helping those closer to home. Our funds both locally and internationally are targeted toward solutions to help socioeconomically disadvantaged populations realize their unlimited potential, focusing especially on sustainable distribution of products and services related to health, education, and agriculture.
- Socioeconomically Disadvantaged: High (target the "extreme poor" in Africa)
- Sustainable Distribution: High (98% repayment rate; near-term target to cover 70% of field costs with client revenue)
- Health: Mid (target reduction in deaths of children age 0-2, with early data suggesting they're succeeding)
- Education: High (training the extreme poor is central to their core values)
- Agriculture: High (target farmers, who account for 75% of world's extreme poor)
- CEO Salary: $13,000 (well below the $147,000 average)