Welcome to Dollar Scholar, a personal finance newsletter written by a 27-year-old who’s still figuring it out: me.
Every week, I talk to experts about a money question I have, whether that’s “What if I don't have a 401(k)? or “How many credit cards do I need?” As I learn, I share simple ways to improve your financial life… and post cute dog photos.
This is (part of) the 37th issue. Check it out below, then subscribe to get future editions of Dollar Scholar every Wednesday.
For a girl who has a LOT of opinions, it can be tough for me to make choices sometimes.
Like if you ask me my favorite food or whether you should subscribe to your local newspaper, I have an immediate answer. (Lasagna and yes, obviously.) But if you want to know who the best Jonas brother is, I’m going to flounder. (It’s tough, because are you asking for the most talented musician? The best interview? The cutest? Those are all different questions, and I could write a thesis on each.)
It’s a personality quirk I’m struggling with during this coronavirus crisis. Due to the nature of my job, I spend upwards of 10 hours online a day, so I’m constantly reading heart-wrenching stories of people who have seen their income slashed as a result of the pandemic. Every time I log onto Twitter, I’m bombarded with links to crowdfunding campaigns, small-business initiatives and donation requests — and I don’t know what to do.
I’m fortunate enough to have a well-paying job. I have a little bit of extra cash, and I want to help others who are down on their luck. But it feels impossible to choose a place to start.
How can I use my money to support others during this crisis? Moreover, how can I ensure my donation has the maximum impact?
To get advice, I Zoomed with the folks at the Center for High Impact Philanthropy at the University of Pennsylvania. Katherina Rosqueta, its founding executive director, began by sympathizing with my overwhelmedness.
“What can be really challenging always, but particularly in crisis rapid-response giving, is things seem to be moving so fast,” she says. “It’s hard to know what matters and who’s the right nonprofit to give to.”
Rosqueta recommended beginning with what I know: organizations that I’ve already supported in the past. Not only do these probably align with my interests, but also I can feel confident that they’re going to use my money to make a difference. The scale of the crisis means pretty much every organization is in desperate need of immediate support right now.
Personally, I’ve been a big fan of my hometown Make-a-Wish for years, for example, so that’s a great option for me. Rosqueta told me it’s important to give unrestricted funds that don’t have a condition on them. That way, she said, the organization has the freedom to deploy the money ASAP for “whatever needs are showing up at their doorstep.”
If I’ve got more to give, I can consider donating to a community fund. Local groups are good because I’ll likely be able to see the effect my cash has in my community — and maybe even know the people it’s aiding. These organizations understand the unique challenges my neighborhood is going through.
From there, I can look to national and international organizations. Kelly Andrews, the center’s director of knowledge management and marketing, said I may want to narrow in on causes relevant to the coronavirus crisis.
For example, medical care is a huge issue right now, so why not give to the International Medical Corps? Another problem: People are unable to afford food, so how about Feeding America or the Global FoodBanking Network? (Andrews specifically highlighted all three of these organizations by name.)
Throughout this, it is important to vet whoever I decide to donate to.
Kevin Scally, chief relationships officer at Charity Navigator, explained that the nonprofits rated by his site must be registered as 501(c)(3) public charities, file Form 990s, be at least 7 years old and generate at least $1 million in annual revenue. When I search for a group on Charity Navigator, I can view all of its financial info, board members, mission statement and more.
(FYI, because I was wondering: Just because a nonprofit isn’t rated by Charity Navigator doesn’t mean it’s sketchy. In those cases, I can still do some research on Candid or by contacting them directly and asking what the impact of my donation would be.)
Transparency is paramount when I’m choosing a recipient for my (admittedly small) donation. As Scally pointed out, that might be a reason not to simply send all my discretionary income to the next random GoFundMe or Venmo that crosses my path. Though the organizer probably has good intentions, it’s hard to be sure.
“The thing about a crowdfunding campaign is that you don’t really have accountability as to where the money is going and where it’s used,” he says.
The bottom line: When choosing where to donate, I should start with organizations I know and then broaden to address community, medical and food needs. Speed is of the essence, as is ensuring my gift is unrestricted and doing some research before I write a check.
However, it’s not just about donating money. I can help by buying gift cards to local businesses, calling to order delivery (instead of using an app that takes a cut), tipping well and — of course — staying inside.
“It’s like your personal portfolio of giving,” Rosqueta says.