Charitable Donations - sometimes they're a bad spending decision

Charitable donations are a wonderful thing. You feel good about helping others and they feel good about being helped. Beware, sometimes a request for a charitable donation is simply a request for you to make a bad spending decision.

My philosophy is simple. I make certain that I'm okay first, so I'm able to help others who really need it.

And then, I decide when, where, in what manner, and how much to help others.



I'm very generous, but I'm also very careful. And, you should be too.

Bad spending decisions, whether for a charity or not, shouldn't be part of your plan for frugal living.

"Give until it hurts" is a great philosophy for the folks making the request for your hard-earned money, but only you can make the decision about whether and in what way you're going support the cause.

When solicitors talk about "helping others in need", they might just be talking about themselves, and this kind of giving until it hurts can be very painful indeed. In these matters, it pays to be careful and keep your eyes and ears open.

Here is an example from my experience.

After the September 11th 2001 attacks on our country, there were a flurry of money raising efforts to help police, firemen, the Red Cross, and you name it! Some were legitimate, and many were just money scams from con artists seizing the opportunity to make money - lots of money.

I received what I believed to be one of the legitimate requests for charitable donations, but it just didn't sit right with me. Here is how I handled it.

The caller asked for a charitable donation to some police and fire fighter fund to help individuals and families of those organizations that were involved in the response to the terrorist attacks. I asked questions first to better understand the nature of the call.

The call went something like this:

Clair: Okay, so you're trying to raise money for police and fire fighters, right?

Caller: Yes.

Clair: These are people that are employed and paid to be police and fire fighters?

Caller: Yes, they are.

Clair: So these people are gainfully employed and they are part of a union?

Caller: Yes, they are.

Clair: And they are well paid because of their union agreements with local governments, right?

Caller: Yes, many would say that they are.

Clair: They have insurance as part of their union contracts don't they?

Caller: Yes, that's part of their contract.

Clair: So they typically have medical, dental, life and disabilty insurance, right?

Caller: Yes, they do.

Clair: So, if they have all of that, and they're well paid, then why are you seeking charitable donations?

Caller: Well, we want to give them a little bit more.

Clair: Listen, I'm self-employed, and I don't have any insurance except what I pay for myself. I don't have disability insurance. Nor do I have life insurance. I don't have dental or optical insurance either.

You can understand my reluctance to give any of my money to organizations whose members are covered by insurance, especially when I don't have such coverage.

Caller: Yes sir, I understand and thank you for your time.

Issue resolved. Whether it was one of the legitimate charitable donations or just another money making scam, I shut them down and showed them that I wasn't going to blindly donate out of emotion.

They wanted emotionally driven charitable donations. They weren't expecting (nor prepared) to run into a clear thinking individual that asks lots of questions, so they were happy to move on to easier targets.

It might not have been a scam, but in my eyes, it certainly was a poor spending decision. In hindsight, I should have asked the guy to make calls on my behalf, since it was clear that I was much more "needy" than those he supposedly represented.

Part of your plan for frugal living most certainly can include charitable donations. I donate generously to three civil rights organizations each year because they need my support, I have verified their worthiness, and that is what I choose to do with a part of my income. Frugal living demands that you budget for such things, if only in your head.

I suggest that you ask the next caller seeking charitable donations just how much he or she has given to the cause, and how much they are willing to donate to your favorite causes; then name three that you would like them to donate to. Enjoy the "sound of silence" for a moment while they think of how to answer you.

If you're in tough financial shape, you have no business giving your money away to others just because they ask for it. My approach to frugal living requires:

• agreement with their cause (this requires research)
• knowing what the money is funding (more research)
• ability to donate without any self "hurt"
• giving what is reasonable

I pick several charities that I think are worthy, then regularly give generously to them, and give my regrets to all the others. Giving your money away to people that simply ask for it one day just shouldn't be part of your approach to frugal living.

Done with Charitable Donations, take me back to Money Making Scams