There’s another MSN Smart Money Blog I’d like to share with you today. It was pointed out to me by a reader. I, in turn, would like to share it with you.

Jim Wang, from blog site, “Bargaineering”, guest posted on MSN’s Smart Money Blog, June 17, 2009, his inflammatory blog, “Devil’s advocate: Don’t donate money to charity.” He then proceeds to list four reasons why it’s fiscally unwise to give additional “hard earned tax dollars” to these organizations when your tax dollars are already sneaking in the back door through subsidies.

Also with all respect to Mr. Wang, is his belief that these charities do not “teach a man to fish”, but instead cause the lazy to suck money out of the system by lingering in homeless shelters and soup kitchens. He suggests one alternative is to withhold money, thus forcing the homeless to find another option, (like work). (Why do I feel like I am in a Dickens novel when I look at those words?)

Two other reasons not to donate to a charity, according to Jim Wang are high administrative costs and the ease with which people give money versus physical help. Jim states, “Money is too easy.” Rather, he asserts, charitable organizations would rather have our time and effort, in lieu of money. ( I am sure he’s polled the charities of his choice for this answer).

I have a fair amount of respect for charitable organizations, having been helped by their generosity in the not so distant past, having been a volunteer myself, a financial donor, and also for producing several charitable activist children.

Here is my Angels Answer response to the Devil’s Advocate.

Angels Answer: Why donating to a charity makes sense even in a tight economy:

Subsidies from the federal government are not enough to fund all costs. Please see the recent Johns Hopkins University study, of over 360 not for profits, released June 29, 2009. “Contributing to this stress has been a perfect storm of impacts including declining revenues (51 percent of organizations); increased costs, particularly for health benefits; declining endowments; and decreased cash flow as a result of restricted credit and government payment delays”.  The full study is attached via link below. Basically, expenses are up, donations are down, and the numbers needing assistance are skyrocketing, beyond federal budget subsidies. These organizations can make it, but they do need our assistance bridging the gap.

 Teach a man to fish? Many not for profits and charitable organizations do just that by employing those they assist. The South Bend, Indiana, Homeless Shelter is a model for this, by having a step by step model for individuals to work or educate themselves out of the program. Also, most Salvation Armies, Unemployment offices, domestic violence centers, and other not for profits do employ their clients. Give a man to fish, does not mean throwing him to the wolves while clutching his fish. It means assisting him or her over a period of time, which these organizations need money to do. If we feed the homeless in soup kitchens, but never teach them life skills, we are shorting humanity itself. And teaching job skills IS what many of these organizations are doing.

 Administrative costs are necessary. How many pastors could preach and feed their families without a salary? Would you like to run a crisis pregnancy center or a homeless shelter with no pay?  It’s my guess that these salaries are for the most part, significantly low already, without a fiscal ax being implemented by the public. These are to a degree businesses. They are in the business of helping others. As such, they do have operating costs, like it or not.

 Helping hands don’t take care of  all expenses. Mr. Wang asserts that helping is more needed by these organizations than dollars. “Money is too easy.” I attest charities need both. My local Boys and Girls Club purchases over a thousand book bags, complete with supplies at school time. By purchasing in bulk, the BGC makes the donation money stretch further. These organizations need both cash and helping hands. Frankly most organizations these days probably need mass quantities of each.

 Give how you can, folks. Whether it’s your time or your money, but realize the impact you have in generosity. There are many times I embrace the inner tightwad. Donations to charities are not included in that thought process. Sorry Mr. Wang. I’ll back you on bargaining and being thrifty, but not in this “revisitation of Scrooge” venture.

You can read the Devils Advocate by following this link:

 http://blogs.moneycentral.msn.com/smartspending/archive/2009/06/17/devil-s-advocate-don-t-donate-money-to-charity.aspx

“Perfect Storm” of Fiscal Stress Hits Nonprofits

 http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=922

They weren’t in the car yet, but I girded my loins to prepare for battle. Brightly colored papers clutched in my youngest daughter’s hands bore evidence of impending drama.  Extracting one she proclaimed, “Mom!” “There’s a gymnastic camp right here in town!” “It’s only $200.00!”  

From middle daughter, aka, the “Cool Teen”, a more stealthy approach: “Hey Ma, can I hang out with my friends this Friday?”  It took some pushing on “Cool Teen” to discover “hanging out” was at an amusement park, (estimated cost, $70.00 for admission plus food).

A third country in the Allegiance of “Spend Mother’s Money Faster Then She Earns It” was heard from later that day.  “Like, there’s like, a Warp Concert Tour, like, next weekend!”  (Tickets for this hard core, head banging, extravaganza were, “like,” $50.00)

It was 4:10 p.m.  If I calculated correctly, my children had designs on $320.00 of my money that day alone.  Calgon take me away!

 I happen to love summer vacation. It’s an opportunity to spend time with my kids, not live by a schedule and be carefree. But there’s one seasonal area, I have come to dread- the fiscal drain.

Why do parents feel compelled to shell out so much money for kids?

 Because we don’t have backbone, that’s why!

 Think back to your childhood, do you remember being bored if you weren’t entertained?

 Boredom? What the heck was that?

How do we escape with sanity and our budget intact?  Often it’s not the big purchases, like a pricey camp, that do us in- it’s the nickel and diming of summer time-ice cream, movies, arts and crafts, etc.

My advice is two-fold:

First- budget! Second- be fair, but strong.

Here’s what I do:

If my income allows, I permit each child to pick one “big” ticket item such as a camp experience, for the whole summer.  This means I don’t have to work continuously to provide constant “fun”. And it teaches them about choices.  As adults, what gets us in trouble fiscally is feeling like we deserve it all. Why not teach kids that financial planning means choices?

 I also budget an extra $21.00 per week for small extras, split between all three girls.

Yeah, this sounds like I am being a tight wad. $7 a kid a week?

What will seven bucks buy?

A regular movie ticket (or a matinee plus small popcorn)

One round of miniature golf

Roller skating (skate rental plus admission)

“The Works” fast food combo meal at most chains

Bowling (two games plus shoe rental)

It’s what I can afford without breaking the bank.  If the kids do not use this amount, it carries into the next week and so on.  Hence, they need to (gasp) work for extra, save, or find “free things” to do.  I still have to remind them of this every summer. They grumble, but fall in place eventually.  

I do not “give it” to them as an allowance, as we also may elect to use this money for family purchases such as zoo or water park visits.

This helps me stay in budget and also gives them a medley of things to do, without feeling deprived.

 Parents, embrace your inner tightwad!

Don’t give your budget a summer vacation. Use this time to teach kids about money management.

Got a summer budget strategy to share with the class? I’d love to hear it!