Schafer: In giving to charity, it's best to chart a plan

Millions of Americans add to the stress of holiday shopping, menu planning and travel this time of year by scrambling to make their donations to nonprofits.

There is no reason for a scramble. Not if you are sticking to your charitable donations plan.

A plan focuses donations on what you and your family really value, allows you to say no to other pitches without feeling rotten. It cleans up the clutter from all the solicitations you won't address and makes giving much more satisfying.

And here's the most interesting benefit, according to advice from financial advisers: It helps givers be more generous.

A plan sounds daunting, but it need not be. Half an hour and one clean sheet of paper may be all you need.

One good way to start is by reviewing donations from the last couple of years. Many folks then see lots of names on the list, with gifts of a few bucks here and a few bucks there. It's apparently common for nonprofit organizations to get donations as small as $5.

Certainly, these are well-intended. But with record-keeping, a thank-you letter and receipt for tax purposes, along with the follow-up mailings, that five bucks is probably gone before it helps anyone.

Involving kids in the discussion is a good idea, both because it may be surprising what they teach you about priorities and also for what they get taught. This teaching on generosity ought to be at least as important as teaching a teenager to parallel park or a 6-year-old to ride a two-wheeler.

A great outcome is a short list of charities that your family cares the most about that you know will use the money well.

For some, the focus may be education, to pay back some portion of the investment that good teachers made in you or the financial aid that made getting a college degree possible. For others it's funding basic needs such as food support or affordable housing.

A short list means more money for those you support, and the main benefit of that is that your involvement in and knowledge about that group increases. And a greater sense of connection gives the experience more meaning.

Money and time

Financial planners have other tips, like considering a multi-year pledge to help nonprofits in planning or making sure to ask about matching dollars from an employer. For those with a little more wealth, good tax-advantaged moves include looking into a kind of mini-family foundation called a donor-advised fund.

There have been discussions in Washington about eliminating or curtailing the deduction for charitable giving as part of the fiscal policy give-and-take, but for now that possibility seems remote. There are a lot of dollars at stake, compared with the scope of the federal budget -- in 2010 individual Minnesota donations were $3.76 billion.

Ted Contag, a financial adviser in Golden Valley for Thrivent Financial for Lutherans, talks about the importance of passion. He related how his own was ignited by a day helping with Mobile Action Ministries, a small group that operates a mobile kitchen in St. Paul for homeless people.

But the most interesting takeaway from my conversation with Contag was the way he approaches his clients' money. His advice is not built on the principle of scarcity -- pounding away on the risks of not having enough money -- but rather in showing people the opposite.

He calls it a "message of abundance."

"The charitable plan is often a permission slip to be more generous," he said. "It helps identify the abundance."

That's the final bit of advice, recognizing that a charitable plan is more likely to have a financial target than a budget. A budget, such as for family vacations, is a cap not to be overspent. A target you have to work to reach.

Personal involvement

In my house the charitable donations plan is on a spreadsheet, and the larger amounts are for things where my wife and I have personal involvement, like Twin Cities Habitat for Humanity or Neighborhood House in St. Paul. Smaller amounts go to nonprofits where friends are deeply involved.

With a checkbook and stamps, laptop and Visa card, we will work the list to fill in what we have missed. But our conversation always seems to end the same way.