Giving Intelligently and Responsibly Takes Time and Effort

Dear Dave,My wife and I have worked hard for many years. We’ve tried to be smart with our money, and follow your principles of saving, spending and giving. Our financial situation is pretty good now. We are debt-free, we’re both close to retirement, and we have a net worth of around $2.7 million. We would like to start giving back at this point in our lives. There are several organizations we’re interested in helping, but how can we know for sure which ones we can trust to use our money wisely?Luis

Dear Luis,I hate to say it, but it’s hard to be 100% sure about these kinds of things. I’m really proud of what you two have been able to accomplish together. I also love the fact that you both want to give and take the matter so seriously. But really, about the best you can do is to put in serious time digging beneath the surface of the organizations you have in mind. Devote lots of effort to researching them, and decide together which organizations are comfortable fits for you both.

My wife and I give most of our donations to Christian ministries. And it’s not unusual for us to take a tour of a place to see what it looks like up close, and talk about the feeling we get while we’re there. If the staff or management aren’t open or forthcoming with anything we consider to be basic information, or if we see signs of financial mismanagement, you better believe it sends up a red flag.

Don’t get me wrong. People who work for charitable organizations have as much of a right to make a decent living as anyone else. But if they appear to be a little too well off, it could be a sign they’re not being responsible with their donations. Take a look at things like their administrative costs, what percentage of donations goes directly to the cause they represent and anything else that would help you two make the right decision. You could even ask the leaders directly what they plan to do with the money from your donation. You have a right to know this.

Giving is like anything else, Luis. It takes some time and hard work to do it intelligently and responsibly. And don’t forget to pray about it, too. Prayer should always be part of any big decisions you make!— Dave

Dave Ramsey is an eight-time national bestselling author, personal finance expert, and host of “The Ramsey Show.” He has appeared on “Good Morning America,” “CBS This Morning,” “Today,” Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions and is the author of numerous books including Baby Steps Millionaires: How Ordinary People Built Extraordinary Wealth–and How You Can Too.