During the holiday season, charitable giving comes to the forefront, but if your budget is tight, it can be difficult to find the cash to make a donation. You shouldn't let a tight budget stop you.
If there's a cause to which you are passionate about giving, experts say small amounts can make a big difference, and giving isn't just about dollar signs, anyway.
Last year, giving by individuals in the U.S. jumped to $258.51 billion, up 5.7 percent from 2013, according to the Giving USA Foundation.
The simplest way to give in small sums is to sign up for automatic, recurring donations in small dollar amounts with a charity of your choice, said Michael Thatcher, CEO of charity watchdog site Charity Navigator. "Ten dollars a month on a credit card is a nice way of concentrating giving over time and managing your budget," he said, adding, "It's easy for the donor, and charities love it." That's because it's a source of donations that they know will be coming in from donors, and predictability of cash flow helps a charity to be run more effectively. "They are able to count on it," he said.
The Charity Navigator CEO stresses that it's a mistake to think about donations to a charity being only about money. People can also give time — in particular, if they have a unique skill set that they can tie to the cause, such as designing a website, offering tax and accounting help, etc. Or even just stuffing envelopes. Thatcher said all of those donations in time and skill can be a "huge benefit" to a charity.
Gift-in-kind items are another way to give, such as computers or office furniture. But it's essential to actually inquire with the charities as to need before pursuing this kind of donation.
Items can also be sold at a garage sale or on eBay or Craigslist, and the money donated to a charity. "That's a way to give a charity proceeds without taking out of a bank account," Thatcher said.
Donating to charity on a budget may call for a bit more planning, said Barry Glassman, financial advisor at Glassman Wealth Services, but it's not impossible, and there are two key points to remember.
Have a plan in regards to how much you're going to give, and know exactly what you want to see your dollars accomplish. Specifically, don't be afraid to specify where you want your money to go, Glassman said. If you donate to the Humane Society, speak up if you want your donation to benefit a certain type of animal.
While the billionaires who donate huge sums to charity can set up their own foundations (like Bill Gates) and LLCs (like Mark Zuckerberg announced this week), it's important for those giving smaller amounts to confirm the legitimacy of a charity and ensure all donations are used properly.
One great way to check the legitimacy of a charity is to go online and visit a watchdog site like Charity Navigator, which ranks charities on a variety of factors. You can browse specific charities by category, making it easy to find what you're looking for and learn about the charity's organizational and financial strength.
Thatcher said whether giving on a tight budget or giving billions, the same rules apply: "Get clear on which cause motivates you to give, and figure out if it's a well-run organization." He added, "Focus will add to the effectiveness of what your dollars do. Focus is important for Bill Gates, too."
Charity Navigator even has a Donor Advisories list that informs donors if their charity is under investigation, has a lawsuit pending or if there are any irregularities with the IRS form 990 — a tax-exempt form that must be annually filed.
It's important for donors to understand the personal tax implications of giving, Glassman said, as there's a lot of confusion. Especially for those on a tight budget who are only giving away small sums, the deduction they are entitled to for a charitable donation may never positively be reflected in their taxes, because they don't have enough deductions overall to opt out of the standard deduction.
"With some people, they believe they are able to deduct, but they don't itemize their deductions, so technically they're not deductible," Glassman said.
— By Angela Johnson, special to CNBC.com