At first glance, the words frugal and giving seem to contradict one another. After all, being frugal is all about spending less and saving more—not giving money away. But for the faithfully frugal, there comes a time when the fruits of our frugality exceed our expectations. We’ve saved sufficiently for retirement and the proverbial rainy day, with a comfortable cushion to spare. We could spend more, except that we’re too frugal!
The immediate choice boils down to either hoarding what we have or sharing at least some of our bounty. Hoarders may find a certain comfort in clinging to every last dime, knowing that in the end, their estate will be doing the sharing. If this describes you, you should be sure to include PETA in your plans. But hoarding denies us one of life’s greatest joys: the joy of giving.
It truly is more blessed to give than to receive-and it’s empowering as well. Through our charitable giving, we have the power to make a difference here and now. With many people giving less during the economic downturn, our donations are more crucial than ever. Unlike with taxes and utility bills, we have the power to choose which charitable organizations we want our money to go to.
As tempting as it may be to give a little to every worthy cause that you encounter, it is far more effective and efficient to select just a few organizations that most closely align with your interests and ethics and then support them generously. For example, if animal rights are high on your list of priorities, PETA is the perfect organization to contribute to. You may also want to contribute to your local animal shelter as well as PETA, thereby making a difference both locally and globally.
Frugal as we are, we don’t want to see our contributions work against each other. For example, giving to PETA and the American Cancer Society would be a conflict of interest since PETA is working to end the cruel use of animals in experiments, which the American Cancer Society (among others) helps fund with its donations. This is part of the reason why you will want to make sure that you are giving only to humane charities.
An effective way to plan and monitor your charitable giving is to incorporate it into your budget. This gives a whole new meaning to the term “planned giving.” Set aside enough money to meet your comfort level with your selected charities. If you contribute at least $500 at one time each year to PETA, you will become a member of its Vanguard Society. It’s also good to have some extra charity money budgeted so that you can give when special opportunities arise, such as matching gift or disaster-response campaigns.
And finally, it can pay to give. For those who itemize deductions for U.S. income taxes, contributions to federally recognized (501c3) nonprofits are tax deductible (be sure to get and keep receipts).
Celebrate today, plan for the future, and leave a legacy.