5 Tips on How to Stretch Your Charitable Dollars

By Dave Carpenter, AP Personal Finance Writer

CHICAGO (AP) — As the recession lingers, strapped charitable donors are still coming to terms with their reduced ability to give.

It's been a difficult time for charities and those who support them. Charitable giving by individuals was down an inflation-adjusted 6% last year, according to the Glenview, Ill.-based Giving USA Foundation, and remains under pressure from the weak economy.

Phone queries from stressed donors wondering what to do have been frequent ever since late last year, according to the Charities Review Council, a Minnesota-based nonprofit which advises donors on how to give effectively. The callers often feel guilty about not being able to give as much as they used to, according to executive director Rich Cowles, but still want to make a difference.

The good news: There are ways to stretch charitable dollars to make sure your contributions have more impact.

Even with less money available for charity, "you can make it go further by being smart in your giving," Cowles said.

Here are five tips for how to make your charitable contributions count more despite less cash:

1. SET UP A GIVING BUDGET. Treat your philanthropy as you would your household expenses and create a budget.

Sit down with your spouse or partner, maybe even your kids, and discuss your values and what causes you want to support — political, women's, Third World, health treatment, disease research or other? Then establish a budget for the rest of 2009 and for 2010, determining how much money you want to give away overall and in each category.

The Charities Review Council recommends earmarking some for a "miscellaneous" category that would cover community needs that might arise or natural disasters bound to occur somewhere.

Choosing the organizations aligned with your values can come after you've laid this groundwork. The budget will help organize your resources and fend off less essential requests.

"So often you'll get a call or someone will come to the door and you don't want to say no," Cowles said. "This gives you a legitimate reason to do so, and to make sure your money doesn't just get frittered away. Just say 'We have a giving plan and we like what you're doing, but it just doesn't fit our plan.'"

2. EXAMINE CHARITIES CLOSELY. Do the same due diligence on your donations that you would your investments or your business. Giving extra scrutiny to the charities you write your checks to is more than merited in the era of Madoff and other scandals.

Take a look at an organization's financial data, going back as far as five years if you want to eliminate any possible doubt in your mind. See who's on the board and whether the directors are all contributors. If not, ask why; you could even make your gift contingent on that.