How Much Should You Be Donating?

Nonprofits are increasingly relying on fewer, more affluent supporters as the portion of Americans who give to charity declines. Just 24% reported a charitable gift in 2015, according to a Chronicle of Philanthropy analysis of IRS data.

Just how much of your hard-earned income should you be donating? The answer, of course, is personal one. But there are a few readily available formulas that can help us construct some reference points.

The most common among them estimates that the average percentage of adjusted gross income (disposable income, basically) donated to charity is 3 to 5%. But the actual (read: documented) percentage has long hovered around 2% for individual giving.

While that may be a good starting point for most, there are too many factors at play for it to be applied universally, like personal financial constraints and how passionate you are about a certain cause, issue, or institution. Ultimately, it’s an equation that only you can work out.

Logical as that may sound, nonprofits seem to have a difficult time appreciating the uniqueness of the donor journey. Until a more concerted effort is made, you’ll need to continue to endure the capital campaigns, annual giving drives, and direct-marketing pleas while you figure this out.

How much you have to give matters, of course, but it’s worth also exploring what you feel your responsibility to your community is. After all, a donation doesn’t always have to be monetary. In many instances, your time and energy is just as valuable to a charity.

Once you pin down what you’re willing to give, turn your thoughts to the causes you’re passionate about. Then do some research to home in on which charities are making meaningful inroads in that area. Charity Navigator and the Better Business Bureau’s Wise Giving Alliance are good places to look.

Nothing says you can’t support lots of charities, but you can generally do more good by giving generously (of your money or time) to one or two you’re particularly passionate about. A lot of attention is given to year-end giving, but sustained support is incredibly valuable to a nonprofit. A habit of generosity becomes a lot more palatable to the giver, too, than an obligation tied to a dollar amount.