How to Develop a Purposeful Plan for Giving Away Money

If you have found your way to this article, you most likely have a generous heart and enjoy giving away money to a favorite cause. But have you ever thought about how you give away money? Do you give purposefully or haphazardly as opportunities pass in front of you?

Developing a purposeful plan for giving away money might seem silly. You may want to give wherever and to whomever you like without feeling held back by a plan. There is great freedom in that philosophy. However, as I’ve found out over the years, there are also great dangers.

Putting together a purposeful plan for giving away money is a fundamental exercise you should go through. In short, it will help you have success with your finances.

Everyone who gets serious about their finances tries hard to make a monthly budget work. We make a plan to pay for the kid’s college. And we work tirelessly in order to support ourselves in retirement.

So why do we ignore this area of our finances where a lot of money could also pass through our fingers?

The fact is we shouldn’t ignore it. Here’s how to get purposeful with your giving.

Know Your Why
You have a great responsibility to manage your giving wisely. So, it’s important to get purposeful with your giving and know your “Why?” Here were several of our reasons:

1. To be intentional with our money. We decided to make deliberate and calculated decisions about where our money goes. It’s not wise to give away money haphazardly without any specific structure or purpose to the process.

2. Guilt and other emotions got the best of us. Guilt giving and emotional giving are two of the deadliest forms of giving. It’s hard to think rationally when overcome with emotion. It’s too easy to get swept up in the moment and give beyond your means or to things you aren’t really prepared for.

3. Lastly, our desire to develop a purposeful giving plan stems from our faith. That reason may not resonate with you. But I believe that God clearly teaches giving in the Bible. It’s my desire to follow through in that regard with a cheerful heart.

In fact, in the New Testament book of II Corinthians, the missionary Paul discussed some pretty specific teaching about purposeful giving. His teachings include how the church was to prepare monetary gifts in advance of his coming to them. Paul clearly advocated planned and purposeful giving (See II Cor. 8:10; II Cor. 9:5).

So, those things served as our “Why?” to develop a purposeful plan for giving away money. Now, let’s look at the process.

How to Develop a Plan for Giving Away Money
So how do you put a purposeful giving plan together? Here are the steps we took, plus some additional giving suggestions I’ve learned along the way.

Step 1: Do an attitude check
Firstly, giving always begins with your attitude. Why are you giving away money in the first place? Giving should not be done for selfish reasons. It’s not about getting noticed or receiving kickbacks. Giving is not about our needs, it’s about meeting the needs of others.

I know that’s simplistic. However, if you are not giving for the right reasons, it will upset the entire plan. Frustration will set in as you try to implement the plan. Giving will become a chore and an obligation if you don’t keep the right perspective.

This is all about developing the proper motivation behind giving away money. It should revolve around being a blessing to, caring for and helping others.

Step 2: Decide What You Value
Ask yourself, “What are you passionate about?”

Answering this question is what step two is all about. If you are single, this is something you can decide on your own or with the help of a friend. For couples, it will take a great deal of communication before moving forward. The last thing you want to do is end up in a relationship money fight over giving.

Don’t neglect this step. Take some time here. The values you identify will play a big roll when you determine where the money goes.

Step 3: Start With A Baseline Amount
“How much to give?” That is the big question.

Obviously this varies on the individual. It’s based on your circumstances and comfort level. There is no recommended set percentage or amount that you should give. It’s a decision you have to make.

We give money regularly. It works best for us to incorporate giving into our monthly budget. It helps us avoid certain pitfalls that come from not giving at all or giving too much.

A baseline amount for us centered around the Biblical teaching of the tithe. So we set aside 10% of our monthly income to give to our local church. If that doesn’t work for you, decide what percentage does.

We set that payment up as an automatic payment from our bank. This step created consistency and discipline and kept us from accidentally forgetting.

Additionally, our regular giving is on the top line of our monthly budget form. We subtract it from our income before any other expenses. This is an important step for those who want to give monthly.

Once you have your baseline amount set, look for other giving opportunities. As your income increases, there will be ways you can give above and beyond your baseline amount.

Step 4: Determine Where the Money Goes
Now it’s time to tackle the toughest step of all. How do you figure out where the money goes?

Certainly, this can be overwhelming. There are so many worthy causes and only so much money to go around. Conversely, there are also many shady causes trying to persuade you into giving to them. Be alert for these.

So how do you figure this out? Remember what you valued in Step 2? Time to focus on those things that you are passionate about. For example, out of our Step 2 discussions my wife and I learned we valued four things when giving money: our local church, organizations that support military families, crises pregnancy centers and overseas missions work.

Three Things to Keep in Mind Here:

1. First priority goes to that which is closest (ex. – family members, church, kid’s school, and organizations within your community and state). After that, broaden your horizon to national and world affairs and organizations.

2. Give to reputable organizations that don’t dig into your donation with excessive administration fees. For example, a high percentage of your donation needs to go directly to the cause, not someone’s salary or company overhead.

3. Give where it has the greatest potential impact. This will revolutionize your giving more than anything else. Does your donation have the chance to help 5 people or 50 people? Can one family be fed or perhaps 20?

Now, that’s not to say you never give to that one family in need. There is certainly a time and place for that. But the main focus should be on maximizing dollars and getting the largest possible return on your giving money.

That’s what we do with investing, right? So why not with giving? If I can support one missionary overseas for $20 a month and their personal ministry impacts thousands, then I’m taking that opportunity.

Step 5: Advanced Giving Steps
Finally, here are a few considerations as your net worth continues to grow about giving away money:

1. Set up an emergency-giving fund. Set aside a certain amount you’d like to use for spur of the moment giving. Keep it in your savings account until needed.

You will always come across opportunities that are not on your radar. Having some cash set aside to give in these occasions loosens some of the rigidity and hesitancy to give that comes with following a set plan.

2. Look at tax considerations for giving. Never give JUST for tax reasons. But if getting a tax break lines up with a passion of yours, then consider giving to it. In such instances, run that decision by an accountant first.

3. Set up a charitable giving account. Wealthier individuals should consider setting up a charitable giving account through an investment company. The big advantage of these accounts is that they allow investors to realize certain tax benefits. In other words, you avoid capital gains taxes because you sold an appreciated asset. Instead of selling the asset, it’s simple transferred into the charitable account, thus bypassing the tax consequences. The funds can then be used to support your favorite charities over time.

Giving Away Money Can Be Fun
In conclusion, the purposeful giving steps we’ve taken have greatly enhanced our ability and desire to give. It has reduced the stress we feel about giving and kept us from making unwise decisions with our money. Additionally, giving away money is more enjoyable now as we think about all the lives we are impacting.

Get started working on your giving plan today if don’t have one. It will change for the better the way you think about giving away money.