Jean Chatzky's Guide to Holiday Giving

Dollars are tight across the country, but many people are still making room in their budgets for charitable contributions, particularly with the holidays right around the corner. Learn how to stretch your resources to do the most good.

Have a Giving Plan
Right off the bat, you need to decide how much money you're going to be able to give this year. It may be a bit less than in years past, but that's perfectly fine—every little bit counts, and the causes you support will be thankful for it. Once you've worked out a number your budget can support, put some thought into how and where you'd like to allocate that money.

These days, it's more important than ever to choose the causes you support wisely. If you're going to give your hard-earned cash, you better do your research. Start by finding out how much of a charity's income goes to programs, as opposed to overhead. This is called the program ratio, and the higher it is, the better job a charity typically does deploying your money. You can find out how particular organizations are doing by going to CharityNavigator.org or by looking over the IRS form 990, which is available at GuideStar.org or on the charity's site.

Once you have this information in hand, you can make comparisons between groups, but just make sure you're comparing apples to apples. An organization with less administrative costs—say, a food bank—shouldn't be compared to a museum, which has to pay multiple employees.

If a cash donation just isn't in the cards this year, you can still give back, of course. Charities are always looking for people who can contribute a few hours a week or even a month. Maybe you care about global warming, AIDS awareness or getting food to people who can't afford it. Whatever your passion is, I guarantee that there is a group out there that will support it. Sites like VolunteerMatch.org can help you do a search in your area.

You may not realize it, but giving is something that kids really enjoy. Did you ever notice how excited they get when they deliver a birthday present to a friend or when they help you celebrate Mother's Day? It's fun for them, as it should be. Get them involved this year by letting them choose a cause that interests them. That way, they'll be more apt to stay with it in the years to come. Then, with your guidance, let them decide how they want to give to that cause. They could give their time by volunteering to, say, pick up trash in a local park, but they could also give a toy that they no longer play with.

One of the best things about the change in seasons is cleaning out your closet and getting rid of the things you'll never wear or use again. It feels good to rid your house of unnecessary clutter, and it feels even better to give those things to someone who will appreciate them. How do you go about it? First of all, do a little research to find an organization that you want to support. Most towns have access to a Salvation Army or Goodwill, but there are smaller groups that can use your help as well—just make sure they're legit by running the name by your local Better Business Bureau office, says Bennett Weiner, chief operating officer of its Wise Giving Alliance. Then, gather the items you want to give, making sure that they're in good condition, and make a list of each item and its value for tax purposes.

Learn how to get your tax deductions!