Donating: the process of giving money to help improve your community, country or a cause. This is where you have the chance to make things better for others. When we give to charities, our place of worship, non-profit organizations we are practicing putting others first. As the saying goes, "It is better to give than receive". So as you are planning your money management you want to think wisely about who you will donate to. First thought:
Charity: This is an organization that uses donations and volunteers to help others and work towards a cause.
A good example of this would be the Salvation Army. If you look on their website they are helping provide Christmas presents for those who can't afford them, providing homes for homeless, helping people with alcohol and drug rehab, job training and much more. They do these things because it falls under their mission statement. Having a statement like this helps guide them and direct what they do. Now before you go and donate to a charity you need to do some research.
When a disaster happens, many non-profits like the American Cross and others want to step in and help. They see this as an opportunity to fulfill their mission of helping those most in need. However, there are others out there looking to make a profit off of the kind hearts that donate. These are called Charity Scams. They say they are helping, but really just collecting the donations for themselves. When donating make sure it is to a reputable (meaning trustworthy) charity. Websites like Charity Navigator help people to look at the factual data behind your giving. It breaks down a charity by Accountability and Transparency and Financially.
Organizations need to be open and honest about how they are conducting their work. Do they share who is on the board that makes decisions, do they share how much their CEO makes, do they document board meeting notes? When they share this information it helps create trust with the donors. Next, you want to check how they have received the money and spent it.
Contributions: This is the money they gain through donations, gifts, membership dues, fundraising events, government grants and other organizations that give to them (like United Way).
Program Expenses: This is the money they spend on the cause they are working towards. For example, this would be dog food purchased for animals at the Pet Shelter.
Administrative Expenses: This is the money that is paid to the employees who work at the organization. (Volunteers are donating their time and work)
Fundraising Expenses: This is money that is being spent to help raise awareness and to receive more donations.
When you research this information it will help you make well informed and impactful change towards the cause you are supporting.
Lastly, let's take a minute to review the four major components of money management.