I haven’t met anyone yet that thinks donating money is bad. After all, one of the great things about having money is being able to use it for good.
There are thousands and thousands of non-profits that work towards goals that are not primarily motivated by profits. Few, if any, are possible without financial donations by individuals, families and companies.
This begs an important question: should you donate money to charities while you are in debt?
Reasons you should donate money while in debt
There are a number of reasons you should continue to donate while you’re in debt. Here’s just a few of them.
- There is never a perfect time to donate money
Let’s face it: There will always be a reason to not donate money. Think about how far you could take the argument that you shouldn’t donate while in debt. Even if you paid off all your consumer debt and student loans, you may say “but I still have a mortgage, therefore I still have debt, therefore I shouldn’t donate.” At the same time you may be taking a vacation every year, upgrading parts of your home, or attending concerts or sport events.
By taking a vacation, getting a new car, upgrading your home, or going out to eat while you are in debt you are saying that these things are more important than donating to non-profits who desperately need funds to continue operations.
Think about a couple trying to decide when the right time to have children is. There is never a perfect time to have children. You can always be more financially prepared. There will always be a reason to not have kids, whether it’s your career or personal goals (like travel) that you want to dedicate time and money to. In the same way there will never be a perfect time to donate money to nonprofits.
- Donations do not have to be huge amounts
While I’m sure every non-profit will happily accept random donations, what helps them even more is consistent donations. When they know they can count on your $20 donation every single month, they can layer that into their budget and future financials. Operations go much more smoothly with consistent revenue streams.
Take this blog as an example. Perhaps I’ll randomly get one $1,000 advertising deal every few months. While this is great, if I can lock in a $300/month advertising deal that I know will stay in place – or is very likely to stay in place – I can better plan my budget for writers, web designers, and other operational needs.
Now that we’ve discussed a couple reasons you shouldn’t donate money while you’re in debt, let’s look at a couple reasons you shouldn’t.
Reasons you shouldn’t donate money while in debt
While I think there is a strong argument to donate money to nonprofits while you are in debt, there are definitely arguments.
- You’re drowning in debt
There are many people who took on a lot of debt over the past few years and are now facing an uphill battle to get their finances back in order. If you are in this situation, it likely makes more sense for you to forego all donations to charity until you have paid down your debt.
Adding another monthly financial obligation to your plate in the form of a charitable donation will be just one more thing preventing you from paying down your debt. While it’s true that nonprofit organizations rely on donations to continue being a going concern, you aren’t helping them long-term by putting your own financial future in jeopardy by not dealing with a massive debt load that is likely holding you back in other areas.
- You have a temporary aggressive debt pay-down plan
If you are aggressively going after your debt and have a short time frame for paying it down, you may have to temporarily put your charitable donations on hold. For example, some people may have a plan to put an extra $1,000 towards their debt for the next two years. It’s likely charitable donations aren’t the only thing they are cutting out of their budget. They will probably forego vacations, cable, going out to eat, etc. to reach their aggressive goals.
I don’t think it’s a bad thing to stop charitable donations if you have a temporary plan to aggressively pay down debt. The key word here is temporary. As I said earlier it’s easy to always have something else to pay for instead of donating to charity.
These are just a couple reasons to not donate money to non-profits while you are in debt.
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Whether you donate money to charities or participate in philanthropy is a highly personal decision. The extent you do that can vary greatly from person-to-person. You can argue both for and against donating while you’re in debt, but ultimately each person has to decide for themselves.
What do you think about donating money while you’re in debt? Do you think people should donate money while in debt or do you think they should stop donating until their debt is gone?
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I agree that this is a highly personal decision – you have to do what’s best for you. For me, I’ve cut back on the amount of the donations, but haven’t stopped completely. Being able to give more is just one more reason I look forward to getting out of debt :).
I think another reason to keep donating is to keep things in perspective. If you donate to a homeless shelter, for example, it might help you realize that your debt situation could be much worse. It’s also a challenge to yourself to think more about what your money is going to.
I’m currently in the process of getting out of debt, and while I don’t have a lot of extra money, I do have time. I volunteer my time for a charity once a year, organizing a relay run team of 10 people, and doing multiple group fundraisers throughout the year. I find this is a great substitute for monetary donations.
I think you can still donate, even if you have debt. Paying it forward is never a bad thing. Hopefully it promotes good karma :)
I agree that it definitely it a personal situation that should be focused on how much debt you have, the interest, etc. I think it’s also important to remember, like you said, that you can still give in one off situations and not be a high amount and most, if not all, charities will still happily take it. I would also say that if financial donations aren’t an option then to look at giving time as many charities will gladly take that as well.
Right now we’re drowning in debt, and I hate that we are not able to donate money. However, once november rolls around and our personal loan is paid off, we plan to start donating small amounts of money. If you want to give back without spending a dime, though, try Charity miles. You rack up money to donate to charity for every mile you walk, bike, or run!
I agree that there is never a “perfect” time to donate money. We donated money when we were still in consumer debt. I think it’s a personal decision.
I think you just have to do what you’re comfortable with. I think one thing people forget is that you can donate other things than just your money. Perhaps equally as valuable as money is your time. Seems like soup kitchens and shelters etc. are more than happy to put you to work if you would like to donate some of your time and help out. You can also try donating items from your house that you are no longer using to the local Goodwill/charity.
If you have a good handle on your debt, then I think donating is fine. But if you’re truly spiraling out of control and don’t know how you’re going to take care of yourself, I think trying to help others needs to go on the back burner. You have to secure your own oxygen mask before helping others.
I smiled when I read this title, DC! I love a good debate. Personally, I don’t have strong opinions on this issue. For my own finances, I do not donate while in debt – every last penny goes toward my student loans. I do plan to donate to my schools and to other organizations that I care about once I’m out of debt, however.
I wouldn’t donate if I wasn’t able to meet my financial commitments or provide for my family. But if it’s part of my monthly budget, and I’m making progress towards my financial goals…..donate away!
I think that there are so many ways to give back and donate and they don’t necessarily have to require a monetary commitment. If you are in debt and struggling with making ends meet, then you should donate your time to your local church or charity. It will not only make you feel better, but it will probably take your mind off your money troubles for a while.
That’s a tough one. I’d say that you should help yourself first, and then try to help others. Like you said, you really can kick the can down the road as long as you want, and procrastinate in donating. But if you’re able to set a goal of donating once you’re debt free, I think you’re on a better footing to help others at that point.
I would say small amounts (like $10 month) are okay, but it really depends on the income and debt level of the person. I like contributing to help others, but I wouldn’t do so if it endangered the wellfare of my family. Like Shannon said below, you can always donate time when you don’t have the money!
I think even with large amounts of debt a person can still find a few dollars at least to give. It doesn’t have to be a lot or 10% as many churches teach. But even contributing small amounts here and there keeps you from thinking life is all about you. The blessings that come from giving cannot be measured in dollars.
I agree with your points. I mean since having a mortgage and student loans are considered debt, you’d always have an excuse not to donate. But like you said, if you are drowning in debt, living paycheck to paycheck…a fiscal emergency…then yes, you need to take care of that first.
Great topic, DC. I am a huge proponent of sharing or giving back, but I also know there are times when giving money just isn’t doable. I think it’s fine to donate money while in debt if you are able to pay all your bills and have a good debt payment plan in place. If you are not able to pay your bills or things are really tough financially, you need to prioritize getting your own finances back on firm footing first. However, that doesn’t mean you still can’t donate – but now you donate your time and efforts through volunteering. I think the simple act of giving back whether it’s money, time or both, can open doors.
Perfectly put, DC!!! I couldn’t have said it better myself. With our huge debt load, we’ve temporarily slashed giving quite a bit, but still pray constantly as to when and where the Lord wants us to give. Often times too, we are able to give of our possessions (such as clothes the kids have outgrown) or our time (such as helping the needy in some way) which helps us to make sure we keep our focus on others even if it isn’t as much monetarily. Great post!
I agree with you that it’s a very personal decision. But if you can’t feed yourself or family or are ready to get kicked out of your apt because you can’t pay the rent, well clearly then it’s a bad idea. I would always say if you can’t donate money, then donate your time, or give some other kind of support like old clothes, shoes. Hell, even a kind word to strangers is better than nothing!
You’ve been reading my mind lately! Debt Debs wrote a post that will be up in a few months on ways you can give to charity while you are in debt, donations don’t have to be money!
I like how you stressed temporary a lot.
I always look at my taxes on my paycheck and realize how many people that is helping. It is like tithing 28%+, which makes me feel good.
I think it’s ok to donate while in debt — I don’t give more than $10 or $20. I also donate my time or services a lot.
There is never a perfect time to donate – so true! There will always be something “more important”, but really, your priorities are what you make of it!
I like how you mentioned there is never a perfect or right time to donate. That statement is very true, especially in this day and age. I try to do a good deed at least once a day whether it being handing a dollar to a homeless person or helping a person whose car is broken down on the side of the road.