MONEY charitable giving

Give to Charity Like Bill Gates…Without Being Bill Gates

Bill Gates, co-founder of Microsoft, co-founder of Bill and Melinda Gates Foundation.
Chesnot—Getty Images

You don't have to be rich to set up the equivalent of a charitable foundation — one that can continue making donations even after your death.

One of my clients — I’ll call him Jonathan — came to me recently with concerns about his estate planning. Jonathan was a successful corporate manager who received a big payday when a major firm acquired the company he worked for. With no children of his own, he’d arranged for most of his wealth to be divided between two favorite charities: a local boys club and an organization that helped homeless people train for work and find jobs. Life had been good to Jonathan, and he wanted to give back.

But recently, there had been some management changes at the homeless support agency, and Jonathan was no longer confident that his gift would be well used. He was thinking about removing them from his trust.

We suggested something that sounded to him like a bold plan, but was really quite simple. Amend your trust, we told him, so that upon your death your funds go to a donor-advised fund — a type of investment that manages contributions made by individual donors.

Jonathan knew what a DAF was. He was already using one for his annual charitable giving because it let him donate appreciated securities, thus maximizing his annual tax deduction. Like many people, however, he’d never thought about donating all his wealth to a DAF after his death. He was under the impression that a donor needed to be alive to advise the fund.

Not so. Jonathan just needed to establish clear rules on who the future adviser or advisory team would be and how he would want them to honor his philanthropic wishes. With a DAF, he could arrange for a lasting legacy of continued giving beyond his own life. Another plus: Because no organization’s name is written into trust documents, changing your mind about what charities to give to is quick and simple. With a trust, changing a charitable beneficiary often requires a trip to your lawyer.

People tend to think that leaving an ongoing charitable legacy is exclusively for uber-wealthy people such as Bill and Melinda Gates, whose foundation gave away $3.6 billion in 2013. While there is no defined level under which a foundation is “too small,” Foundation Source, the largest provider of foundation services in the US, serves only foundations with assets of $250,000 and up. While foundations offer trustees greater control over investing and distribution of gifts, they are costly to set up and run, and have strict compliance rules.

DAFs offer an alternative. Their simplicity, relatively low cost, and built-in advisory board make them an ideal instrument for securing a financial legacy. Unlike foundations, there is no cost to set them up. And the tax advantages are better. The IRS allows greater tax deduction for gifts of cash, stock, or property to a DAF, compared with a foundation. Foundations have to give away 5% of their assets annually, but there are no distribution requirements for DAFs.

All DAFs have a board of directors as part of their structure. Many of them are willing to maintain the gifting goals of a donor after their death and insure that the recipient charities are eligible for the grants each year. At my firm, we have been asked to serve as part of clients’ DAF’s adviser team, to which we have agreed. Upon Jonathan’s death, we will continue to monitor his charitable recipients for quality of services, efficiency, and results — all very important goals of Jonathan’s.

You have many options to choose from. DAFs come in many shapes and sizes, from local community foundations to national organizations. Most of the independent brokerage firms have their own funds, with minimum initial contributions as low as $5,000.

With a little research, a family should be able to find a suitable home for their estate and leave a lasting legacy — whether they are rich, Bill-Gates-rich, or not wealthy at all. To learn about finding the DAF that fits you or your loved one’s vision and values, one way to get started is to check out the community foundation locator at the Council on Foundations.

———-

Scott Leonard, CFP, is the owner of Navigoe, a registered investment adviser with offices in Nevada and California. Author of The Liberated CEO, published by Wiley in 2014, Leonard was able to run his business, originally established in 1996, while taking his family on a two-year sailing trip from Florida to New Caledonia in the south Pacific Ocean. He is a speaker on investment and wealth management issues.

MONEY Financial Planning

How to Be Charitable…and Hold Onto Your Money

Bench in Yosemite Valley.
Bench in Yosemite Valley. Geri Lavrov—Getty Images

You can inexpensively plan for a donation from your 401(k) while retaining access to the account if you need it.

After they got married, I met with Luke and Jane, both 33, to think through how much they are going to spend and how much they are going to save. Luke is a gentle soul. It took him many years to find work that he could feel good about, and he currently has a good-paying job. He wants to keep working forever.

Part of him seemed shocked, although happily so, by his fortunate financial situation. He feels that he and his wife together make a lot more money than they need.

If he knew their finances were always going to be the way they are now, he’d give more money away. He gets a lot of satisfaction from financially supporting changes he feels are positive in the world.

One of the things that Jane loves about her husband is his philanthropic bent. But she’s also concerned they might give a lot of money away and then regret it. They plan to start a family within the next five years. How can they decide to give money away when they might need it later?

I left our meeting somewhat frustrated, because I didn’t have a great answer to their conundrum.

Meanwhile, I was working on a book about connecting all areas of finances with meaning. Previous authors have explored how to consciously spend or invest. But I wanted to write about not only spending and investing, but also taxes, estate planning, and insurance — all areas of personal finance.

The book idea sounded good. Then I had to write the thing. I know a lot about the subject, but when I got to the chapter about estate planning, I drew a blank.

After what I deemed an appropriate length of procrastination, I started writing the dreaded estate chapter. I found myself thinking about Luke. At the same time, I was reviewing everything I do when I talk to clients about estates, focusing on the angle of more meaning. More meaning.

Then some ideas started sparking.

Reviewing 401(k) beneficiaries, for instance, is something I talk about during estate planning meetings. Seems mundane, but wait, there could be something there. This is cool, I thought as I wrote.

What if Luke designated someof his 401(k) — or all, if he really wanted — to charity? Say, the National Parks?

It wouldn’t cost Luke a dime now. Plus, it’s totally revocable before he dies. If and when Jane and he have kids, he’ll revoke the designation. So during his critical period of family financial responsibility, he can leave his 401(k) to Jane and the family. But if it’s just Jane and him, setting aside some money in case of his untimely death is one answer to the conundrum — how to give more without regretting it.

Other details I uncovered when I wrote and researched this strategy: Larger, well-established charities are more likely able than smaller ones to handle a 401(k) donation. The theater company down the street generally won’t.

Setting up this designation doesn’t cost anything; Luke doesn’t have to talk to an attorney. Jane will have to sign off on it, but she’s fine with it.

Other perks? He might be able to designate what his 401(k) donation is used for, in the case of his death, and the charity might recognize him on a plaque at his favorite park. Charities vary on how they recognize these gifts. The recognition isn’t just for ego gratification; it encourages other people to give, too.

Luke doesn’t have to risk their retirement, and I’ve got a good idea for my estate chapter.

————————

Bridget Sullivan Mermel helps clients throughout the country with her comprehensive fee-only financial planning firm based in Chicago. She’s the author of the upcoming book More Money, More Meaning. Both a certified public accountant and a certified financial planner, she specializes in helping clients lower their tax burden with tax-smart investing.

MONEY Taxes

5 Things to Do Now To Cut Your Tax Bill Next April

If you want to owe less for 2014, start your year-end tax planning today.

When everyone else starts loading their backpacks and shopping the back-to-school sales, I know it is time for me to dive back into TurboTax.

That’s because fall is the perfect time to plan my approach to the tax forms I won’t file until next April. By using the next four months strategically, I may be able to reduce the amount I have to pay then.

This is a particularly easy year to do tax planning, because the rules haven’t changed much from 2013. If you do your own taxes on a program like Intuit’s TurboTax or TaxAct, you can use last year’s version to create a new return using this year’s numbers, and play some what-if games to see how different actions will affect your tax bill.

If you use a tax professional, it’s a good time to ask for a fall review and some advice.

Here are some of the actions to take now and through the end of the year to minimize your 2014 taxes.

1. Feed the tax-advantaged plans. Start by making sure you’re putting the maximum amount possible into your own health savings account, if you have one associated with a high-deductible health plan. That conveys maximum tax advantage for the long term. Also boost the amount you are contributing to your 401(k) plan and your own individual retirement account if you’re not already contributing the maximum.

2. Plan your year-end charitable giving. You probably have decent gains in some stocks or mutual funds. If you give your favorite charity shares of an investment, you can save taxes and help the charity. Instead of selling the shares, paying capital gains taxes on your profits and giving the remainder to your charity, you can transfer the shares, get a charitable deduction for their full value and let the charity—which is not required to pay income taxes—sell the shares. Start early in the year to identify the right shares and the right charity.

3. Take losses, and some gains. If you have any investment losses, you can sell the shares now and lock in the losses. They can help you offset any taxable gains as well as some ordinary income. You can re-buy the same security after 31 days, or buy something different immediately. In some cases, you may want to lock in gains, too. You might sell winners now if you want to make changes to your holdings and have the losses to offset them.

4. Be strategic about the alternative minimum tax. Did you pay it last year? Do you have a lot of children, medical expenses and mortgage interest payments? If so, you may end up subject to the alternative minimum tax, which taxes more of your income (by disallowing some deductions) at a lower tax rate. Robert Weiss, global head of J.P. Morgan Private Bank’s Advice Lab—a personal finance strategy group—says there are planning opportunities here. If you expect to be in the alternative minimum tax group, you can pull some income into this year—by exercising stock options or taking a bonus before the year ends—and have it taxed at the lower AMT rate. It’s good to get professional advice on this tactic, though. If you pull in too much money you could get kicked out of the AMT and the strategy would backfire.

5. Look at the list of deductible items and plan your approach. Many items, such as union dues, work uniforms, investment management fees and more are deductible once they surpass 2% of your adjusted gross income. Tax advisers often suggest taxpayers “bunch” those deductions into every other year to capture more of them. Check out the Internal Revenue Service’s Publication 529 to view the list, and try to determine if you want to amass your deductions this year or next. Then shop accordingly.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com.

MONEY charitable giving

How to Give Smarter in an ALS Ice Bucket World

Ice bucket challenge
Tournament Director Anne Worcester takes the ALS Ice Bucket Challenge with the help of Tennis players Simona Halep, (left), Caroline Wozniack, (centre), and Petra Kvitova, (right), during the Connecticut Open at the Connecticut Tennis Center at Yale, New Haven, Connecticut, August 17, 2014. Tim Clayton—Corbis

The viral success of the ALS fundraising campaign is raising questions about whether this is the best way to donate money. Here are some answers—and advice to help you make sure your contributions go to the worthiest causes.

As is inevitable with something as wildly successful as the ALS Ice Bucket Challenge—a stunning $62.5 million has been raised for the ALS Association from July 29 through August 23, vs. just $2.4 million for the same period last year—a bit of backlash is developing, and thoughtful voices are starting to raise concerns about the charitable giving campaign’s message and impact.

Among them: MONEY reporter Jake Davidson, who wrote an opinion piece for Time.com in which he pointed out problems with the way the campaign is crafted: Folks are asked to donate money to help battle ALS or pour a bucket of ice water on their heads; if taken literally, all those funny videos of celebs and Facebook friends would be of people who prefer being cold, wet, and uncomfortable to helping to fight the disease.

Davidson, whose father died of ALS, also questions how much the campaign has actually educated people about the disease since many of the videos don’t mention ALS or treat it as an afterthought to the main event, a point that Slate’s Will Oremus also made. And Will Macaskill, a research fellow in moral philosophy at Emmanuel College, charges on Quartz.com that such trendy fundraising drives ultimately end up cannibalizing giving to other causes.

Well, here’s the good news for those of you who have donated to ALS charities in the wake of the Ice Bucket Challenge: According to CharityNavigator.com, which evaluates nonprofits, at least some of your fellow new donors are taking the time to learn more about the disease and the organizations that help fight it. Page views on its site for the ALS Association, the main charity behind the campaign, were up to 16,000 through the first 17 days of August, an 8,500% increase compared to the same period last year, reports Charity Navigator’s Sandra Miniutti.

You can also feel good about the organization you’re donating to: The ALS Association receives Charity Navigator’s highest four-star rating, and devotes about 72% of the money it raises to the programs and services it provides (the rest goes to administrative expenses and fundraising costs). (Check out the group’s page on Charity Navigator here.)

What about the charge that the money raised by the Ice Bucket Challenge for a relatively rare disease (30,000 affected in the U.S. by the ALS Association’s estimate) takes money away from groups working to fight more prevalent illnesses, such as Alzheimer’s (which affects 5.2 million patients in the U.S.) or diabetes (25.8 million)? Well, there’s a reasonably easy fix: Make a donation to charities that help battle those diseases as well. The Alzheimer’s Association, for instance, also receives a four-star rating from Charity Navigator.

Or give money to other worthy causes you’re passionate about. Among those groups that consistently earn a four-star rating or other top-notch marks from Charity Navigator: The Children’s Aid Society, Doctors Without Borders, the Navy Seal Foundation, Project C.U.R.E., and the United Nations Foundation, among dozens and dozens of others.

To make sure you donate to an organization that will use your money wisely, conventional wisdom is to look up your preferred group’s financials on CharityNavigator.org or Guidestar.org and stick with ones that limit their overhead expenses to less than 20% of their budget. Bear in mind, though, that expense ratios don’t tell the whole story since some nonprofits have higher administrative costs because of the nature of their work.

You also want to look at how well the charity works to support its mission. Two sites that can help you suss that out: MyPhilanthropedia.com pulls together experts to recommend and evaluate charities in 35 different causes, and GreatNonprofits.org offers crowd-sourced reviews of the work charities are doing, as told by volunteers, donors, and beneficiaries—sort of like the Yelp of the nonprofit world.

This story was updated on August 24 to reflect more recent donation totals.

 

 

TIME health

We Need To Do Better Than the Ice Bucket Challenge

Ice Bucket Challenge
Boston City Councillor Tito Jackson, right, leads some 200 people in the ice bucket challenge at Boston's Copley Square, Thursday, Aug. 7, 2014 to raise funds and awareness for ALS. Elise Amendola—AP

The Ice Bucket Challenge is problematic in almost every way. It's also raised millions for charity. How can we reconcile those two facts?

I remember the first time I heard about the Ice Bucket Challenge. It was a few weeks ago when photos and videos of people dumping water on their heads began appearing on Facebook. Soon, I started to see headlines on twitter mentioning one famous person jokingly challenging another. It sounded fun.

I also remember when I found out the Ice Bucket Challenge was started to combat ALS, the neurodegenerative disease my father died from 18 years ago. That was last Saturday. Initially, I was overjoyed all this attention was now focused on ending a disease that had caused me so much pain. My favorite hockey stars were participating, and Ethel Kennedy even challenged the president to douse himself.

But when I looked closer, I became uneasy. No wonder it took me weeks to learn the Ice Bucket Challenge was linked to ALS. Most of its participants, including Kennedy and Today’s Matt Lauer didn’t mention the disease at all. The chance to jump on the latest trend was an end in itself. In fact, the challenge’s structure seems almost inherently offensive to those touched by ALS. Here’s how the ALS Association describes the rules:

The challenge involves people getting doused with buckets of ice water on video, posting that video to social media, then nominating others to do the same, all in an effort to raise ALS awareness. Those who refuse to take the challenge are asked to make a donation to the ALS charity of their choice.

That means everyone you’ve ever seen dump water on themselves, per the rules, is not asked to donate. They may choose to, but the viral nature of this fad appears centered around an aversion to giving to money. “Want to help fight this disease? No? Well, then you better dump some cold water on your head.” The challenge even seems to be suggesting that being cold, wet, and uncomfortable is preferable to fighting ALS.

Ice Bucket defenders would argue this is all just meant to “raise awareness,” meaning those who participate are still doing good without donating. ALS needs all the awareness it can get, but somehow I doubt many learned a whole lot from contextless tweets of wet celebs smiling and laughing.

But here’s where my argument breaks down. Problematic elements aside, the Ice Bucket Challenge has raised $2.3 million since July 29th. That money will go towards treating people just like my father, and maybe one day, finding a cure. So do the ends justify the means?

After thinking long and hard about it, my short, reluctant answer is yes. I’m not going to stand here and try to stop a trend that is doing so much good. I’m also encouraged by an increase in the number of participants who I’ve seen at least mention ALS alongside their tweets and Facebook posts. I plan on participating myself, and I urge everyone reading this to join me. You can donate to ALS research here.

But at the same time, I can’t help but feel this challenge could have done so much more good if it were structured differently. Maybe people could dump ice water on friends who haven’t donated as goofy way of encouraging others to give, or dump water on themselves before promising to donate. Maybe helping ALS could at least have been presented as something other than a consolation prize.

Articles like this one, reductively titled “Stop hating on the ice bucket challenge — it’s raised millions of dollars for charity,” miss the point. In an age where hashtag activism and information-free awareness campaigns are becoming more and more common, we should be very conscious of how to make viral trends as useful as possible.

The Ice Bucket Challenge has done a lot of good. Let’s make sure the next one is even better.

MONEY Charity

How to Tell a Do-Gooder Friend You Can’t Donate. Again.

Have a pal who's soliciting for a pet cause every other week? Use these conversational cues to decline without coming off as callous.

Got a friend who fiercely invests time and energy in a charitable cause—and always hits you up for donations to it? Supporting an organization your pal cares about feels good at first, but you may not have enough funds or passion for this particular charity to keep shelling out for gifts.

Your friend may not realize that repeatedly soliciting contributions from you is making you uncomfortable. “What’s blinding your friend? Probably their enthusiasm,” says Maggie Baker, a financial psychologist and author of Crazy About Money. Of course, the fact that your friend’s request is heartfelt makes it all the harder to say no to him or her.

Here’s how to gracefully put an end to your donations without losing a friendship.

YOU SAY: “I am so impressed by all the volunteer work you’ve been doing. I admire your commitment.”

Open the conversation by applauding your friend’s dedication to the cause, says Baker. If you’ve made your friend understand how supportive you are before you decline a request for money, your decision won’t seem like a personal rejection.

YOU SAY: “I’ve run through my budget for charitable donations this year, so unfortunately I can’t make this a priority right now.”

You don’t have to tell your friend all the nitty gritty details of your finances—or even that you don’t agree with the philosophy of the non-profit or political candidate that he or she is backing. Explaining that you’ve exhausted your giving budget this year will reinforce that your “no” is not personal and help you avoid any unpleasant locking of horns about your divergent opinions.

Another diplomatic response: “It’s great you’re doing that, but I’m very careful about how I budget for charity,” suggests financial therapist and money coach Amanda Clayman.This allows you convey to your friend that you have other priorities when it comes to charitable giving.

What if you don’t have a budget for your charitable spending? This is a good time to create one. “It’s helpful to have a budget,” says Neal Frankle, a financial planner and author of Why Smart People Lose a Fortune. “When that budget is up, it’s up.”

Related: How do I set a budget I can stick to?

YOU SAY: “I hope you understand where I’m coming from. For now I won’t be able to contribute any more to this cause, but thanks for thinking of me.”

Be polite but firm. Avoid over-apologizing for having different financial priorities. “Don’t try to manage other people’s feelings,” says Frankle. “If you approach someone with honesty and compassion, hopefully they’ll reciprocate.”

Though this might seem like an uncomfortable conversation, financial psychologist Brad Klontz says it will likely benefit both parties. “Being really honest with your friend is a test of the strength of the relationship,” says Klontz. “The person may be mortified that to find out he’s making you uncomfortable.”

MONEY Travel

Getaways That Give Back

Choosing a volunteer vacation can be daunting. These four affordable options are worth your time, money and effort.

  • You Have Time and Skills

    Got a couple of weeks to spare? You’ll find a variety of volunteer options in far-flung locations that are out of range of travelers limited to a short getaway.

    Some will even let you put your professional know-how to work, particularly if you’re, say, a doctor, nurse, or veteran teacher.

    A caveat: Long trips and international plane tickets have a tendency to be pricey.

    The trip: Travelers who can get away for 19 days should check out Road Scholar’s excursion to Rajasthan in northwest India. Previously known as Elderhostel, nonprofit Road Scholar has been leading service trips aimed at the 50-plus crowd for 15 years.

    Volunteers on the Rajasthan itinerary will spend mornings tutoring middle- and high-school-age students in English (previous teaching experience not required).

    Yves Marceau, director of program development, says Road Scholar chose this location in part because of the area’s tourist industry, which can provide locals with good jobs — provided they speak English. When you’re not in the classroom, tour cultural sites, see a cricket game, or attend lectures on topics like India’s public education system. Volunteers stay in B&Bs and hotels, such as the four-star Trident Agra, near the Taj Mahal.

    The price: The itinerary costs up to $3,145, which covers most meals, local transport, activity fees, and medical evacuation insurance.

    One way to save: Get your flight through Road Scholar. A March roundtrip ticket from New York to New Delhi booked through the organization costs $950, vs. $1,100 on Kayak.com.

  • You need some me time

    Given that the typical American worker takes just 10 vacation days a year, according to travel booking site Expedia, you may want to mix your volunteering with a little straight R&R.

    One option: Some outfitters offer packages with a “taste” of service, which tack a day or two of volunteering onto a typical vacation. U.K.-based Hands Up Holidays, for one, organizes trips to places like Peru and New Zealand for travelers who want to spend about a quarter of their time volunteering.

    The downside? Many of these itineraries are run by luxury travel firms and tend to be expensive. Hands Up charges an average of $4,000 per person.

    To trim that bill, go DIY. “It’s not difficult to add a day on your own,” says Shannon O’Donnell, author of The Volunteer Traveler’s Handbook, who suggests searching for nonprofits at your destination (try a site like allforgood.org) and arranging a visit.

    The trip: The Best Friends Animal Sanctuary, surrounded by the red rock cliffs of Kanab, Utah, takes in hundreds of cats, dogs, horses, rabbits, and other animals that have been abused or neglected. And with 1,700 creatures at the sanctuary at any one time, volunteers are essential for getting all of them fed, groomed, and exercised each day. (Best Friends Animal Society, which runs the Sanctuary, has partnered with the ASPCA on animal rescue initiatives.)

    When you’re not walking a pup, grooming a horse, or mending a fence, there’s plenty to do nearby: Bryce Canyon, Zion National Park, and the Grand Canyon are within a 90-mile drive.

    The price: There’s no charge to volunteer. Best Friends has on-site cabins and cottages, priced from $60 to $140 a night.

    Prefer something a little cushier? Many nearby hotels offer discounts for Best Friends volunteers. At the Canyons Lodge, for example, you’ll get 15% off, bringing a deluxe queen or king room in the modern, quirkily designed hotel down to $76 to $135, depending on the time of year.

  • You’re a science geek

    Why not turn off the Discovery Channel and pick up the trowel yourself? Some trips let you assist scientists in the field, studying the habits of sea turtles or excavating ancient Roman ruins.

    These excursions tend to be in remote and costly destinations but include perks such as scientific lectures and comfortable lodging. And don’t worry if you have more curiosity than know-how.

    “In most cases, you don’t need special skills,” says Andrew Mersmann, author of Frommer’s 500 Places Where You Can Make a Difference.

    The trip: Perfect for marine biologist wannabes, nonprofit Earthwatch offers a nine-day excursion to study the habits of whales and dolphins living in Costa Rica’s Golfo Dulce, an inlet on the country’s southern Pacific coast.

    Earthwatch, the granddaddy of science-based trip organizers, excels at choosing projects where volunteers can both advance worthwhile research and enjoy a unique location, says William Rossiter, president of the Cetacean Society International, a marine mammal conservation group.

    The ultimate goal of the Costa Rica project is to gather the data needed to establish a marine protected area. Volunteers train for a day and a half, then spend much of the rest of the week on boats, observing and photographing the animals.

    Projects like this one, where the volunteers monitor and take notes, free up the scientists to focus on the high-level aspects of the research, says Rossiter. There’s also a day reserved for hiking and cultural activities.

    The price: The Costa Rica trip is shorter and based in a more accessible locale than many science-based itineraries, keeping the price reasonable. The getaway, which includes meals, eco-lodge accommodation, emergency insurance, and more, is $1,875 — 25% less than the typical Earthwatch excursion.

  • You want to bring the kids

    A volunteer vacation may sound like an ideal family getaway, but many trips are limited to kids 16 and older. And let’s say you do find one that allows rugrats: Most organizers charge per person, which adds up quickly when you bring the brood.

    Don’t give up. While operators don’t always advertise trips as kid-friendly, they may be able to suggest specific itineraries that will work for families, says Doug Cutchins, co-author of Volunteer Vacations. A few may even be willing to provide youth discounts, so don’t hesitate to ask.

    The trip: Global Citizens Network, a nonprofit that has been running volunteer trips focused on working with indigenous communities since 1992, welcomes children as young as 8.

    “Family travel is our niche,” says Molly Stern, program coordinator, noting that many trips take place during summer or school vacations. Next July, you and your family could spend eight days in La Push, a town on the northwest coast of Washington that’s home to the Quileute Native American tribe.

    GCN excels at collaborating with local groups, says Genevieve Brown of the International Volunteer Programs Association, and the La Push trip is no exception. Volunteers often help with construction and maintenance projects and get to know locals, partaking in La Push events like drum circles or community salmon bakes on the beach.

    On days off, you might head to the forests of Olympic National Park, about an hour’s drive east.

    The price: At La Push, adults pay $1,200 each. The fee for kids age 15 and under is half price — one of the most generous discounts around. Meals and rustic lodge accommodations are included.

  • 5 things to know before you sign up

    The quality of volunteer vacations varies. Here’s how to vet your trip organizer and dig into the details of the itinerary.

    • Ask about the work you’ll do, the goal of the project, and whether community members will be actively involved. “The best programs are the ones where volunteers support the efforts of locals,” says Zahara Heckscher, co-author of How to Live Your Dream of Volunteering Overseas.
    • Check references. Organizations should be able to refer you to past volunteers who can talk about their experiences.
    • Find out whether you can deduct the cost of your trip. To do so, you must volunteer for an IRS-registered charity and demonstrate that you worked eight hours a day, five days a week.
    • Volunteer vacations are run by non- and for-profit groups. Both may offer fine trips, but they divvy up your fee in different ways. To get a sense of where the money goes, ask what percentage is used to fund research or support a project.
    • There’s no industry-wide certification, but the International Volunteer Programs Association does require that members adhere to best practices, such as partnering with local organizations whenever possible. For more, go to volunteerinternational.org.
MONEY

Make Your Charitable Giving Go Further

Not knowing how their money will be spent causes some people to hold back from giving to charities. Photo: Adam Voorhes

Most of us feel generous in December, the top month for charitable donations, reports the Atlas of Giving. But regardless of when you give, you want to make sure that the funds are actually used to do real good.

“Not knowing how their money will be spent sometimes holds people back from supporting a charity,” says Jason Franklin, who teaches nonprofit management and philanthropy at New York University and is executive director of Bolder Giving, a nonprofit focused on helping Americans give more effectively.

Meanwhile, recent news reports that major charities employ telemarketing firms that eat up more than half of funds raised may not have inspired confidence to open up your wallet.

Use this guide to make sure the maximum amount of your donation is going toward a deserving cause.

Sharpen your focus

A 2012 study from the Chronicle of Philanthropy reports that the median amount American households donate to charity each year is $2,564. That’s a nice chunk of change, but not if you’re divvying it up among dozens of organizations.

“For every gift, there are fixed costs associated with stewarding and tracking it,” adds Patrick Rooney, director of the Center on Philanthropy at Indiana University. “So the smaller the gift, the larger the percentage that goes to transaction and administrative costs.”

Related: Tighten up Your Holiday Spending Budget

Don’t want to limit your donations to one or two organizations all year? Franklin suggests using the 50/20/30 rule: Half your giving should be focused on one charity — the gift you’ll spend the most time thinking about. Then set aside 20% for small impulse gifts and the final 30% for institutions you support on a regular basis, like your alma mater or your church.

Get with the new thinking

For the past decade the conventional wisdom has been to look up your preferred organizations’ financials on GuideStar.org or CharityNavigator.org and stick with ones that limit their overhead expenses to less than 20% of their budget.

But expense ratios don’t tell the whole story — some nonprofits have higher administrative costs because of the nature of their work, says Fred Setterberg, co-author of “Giving with Confidence: A Guide to Savvy Philanthropy.” (Note: Anything above 25% should still raise a red flag, says Franklin.)

Today, organizations that vet charities are increasingly focused on figuring out which ones are doing the best work to support their mission, says Sean Stannard-Stockton, a Burlingame, Calif., financial adviser who specializes in charitable giving.

Two sites can help you suss that out. MyPhilanthropedia.com (recently acquired by GuideStar) pulls together experts to recommend and evaluate charities in 31 different causes. GreatNonprofits.org offers crowd-sourced reviews of the work charities are doing, as told by volunteers, donors, and beneficiaries — sort of like the Yelp of the nonprofit world.

Also dig into the organization’s website yourself to see how it frames its goals: Specificity is important, says Jacob Harold, who formerly led grantmaking for the Hewlett Foundation and is now the CEO of GuideStar.

Related: How do I set a budget I can stick to?

A charity that says it’s going to train 10,000 people in East L.A. and ensure that 4,000 will get jobs between now and the end of 2013 is likely to spend your donation more carefully than one that says it’s “going to end poverty.”

Pay the old-fashioned way

Credit card and other processing fees can eat up as much as 5% of your donation to a charity — so when you can, write a check or issue one through your bank’s online bill-paying system.

A charity you love phones to ask for money? It’s best to say no — the telemarketing firm will get a cut of what you donate. The exception: Telethons that are run by universities or public broadcasters typically don’t eat into the funds raised, but it’s still best to send a check directly to the organization.

Once you do, get a receipt to deduct contributions. For donations of $250 or more, you also need a note from the charity stating whether goods or services were provided in exchange for the gift. After all, ’tis better to give and receive.

MONEY

Tell the Billionaires Where to Give

As you’ve probably heard, billions of dollars will be flowing into charitable organizations worldwide in the coming years, thanks to the Giving Pledge, a project spearheaded by Warren Buffett and Bill and Melinda Gates.

Thus far, about 40 U.S. billionaires have agreed to give away at least 50% of their wealth, according to the Giving Pledge. And while the Giving Pledge hasn’t released a tally, Forbes.com estimates that America’s wealthiest will give away an additional $120 billion or more in the years to come.

Considering that the total charitable giving in the U.S. has been hovering at about $300 billion per year for the last few years, according to the Giving USA Foundation, the amount pledged represents an astounding increase. While many billionaires will continue to give to causes they hold dear, perhaps some will be open to suggestions.

Speak up!

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