How Much Should We Give?

June 3, 2013

We are often asked how much an individual should give to charitable organizations each year or what formula should be used to determine how much to give. There isn’t one formula or percentage that is right for everyone, but here are some suggestions regarding the history and standards of giving:

Set a goal for your charitable giving each year–it’s good to have a specific goal to reach. Then as your income increases over the years, so should your annual giving.

Short of the mortgage tax return, charitable giving is one of the best tax breaks you have at your disposal. Seek the advice of your accountant or financial advisor when planning your charitable giving for the year.

Historically, in the Judeo-Christian tradition, the Old Testament strongly encouraged what they called “tithing.” Tithing is the practice of giving one-tenth of your gross income to charitable outlets. Tithing has become a spiritual and religious practice in many Christian churches and other spiritual institutions today. No matter what your religious or personal beliefs may be, 10% of your after-tax income is a good benchmark for gauging your generosity in life.

For those in the upper income brackets, you may want to consider giving away more than 10% of your income. An extraordinary generous example is Warren Buffet, one of the world’s wealthiest individuals, who announced he would give away 85% of his fortune to charities. On the other hand, if you make a more modest salary, you might consider donating 10% of your disposable income.

Another suggestion is to treat your giving just as you might your monthly investment into your 401(k) or a college fund. Set up an automatic payment to be made monthly to a particular organization. This way your giving won’t seem to hurt as much, since it will disappear right out of your checking account before you even see it.

NOTE: If your family is in debt, prioritize paying off credit card debts and other high interest loans before making any large charitable commitments. However, you can still give a little each year while you pay off your debt. Remember, every little bit helps.

Originally Posted: June 3,2008 on


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