It’s been a long time since I’ve gone through my clothing and eliminated items which are no longer appropriate for wear. For most of my life so far, my habit of keeping clothes for a long time—until recently, I still had a few items left from high school (1994)—was out of necessity. I just didn’t have the money to replace clothing often. I decided, thanks to some encouraging from my girlfriend, that it was time to get rid of clothing I no longer wear either because I just don’t like them or because they no longer fit. Fortunately, my income supports the decision.

I was able to fill five bags full of clothing with mostly shirts that are now too tight or hopelessly out of style.

Rather than throw my unwanted garbs in the garbage, although lexically logical, I’d rather pass them along to someone or some organization that can make use of them or of the income that could be gained in exchange. I’ve seen bins by gas stations and malls labeled for unwanted clothing, but I am skeptical of these receptacles. To whom do you donate your used clothing? I’m willing to entertain any suggestions. I’m not trying to earn any money in exchange for my items, I just want them to eventually arrive in the hands of people who might need them.

While I ponder this and your suggestions, here are some personal finance articles you may enjoy. Read the rest of this article »

When you’re a world class professional athlete, you’re in high demand. When you’re the best, or nearly the best, at your particular skill in the developed world, the payoff can be huge.

For example, right now, there is no one on this planet who can compare skills with Tiger Woods. Yes, every person in this world is unique and every person is special, but Tiger is special in a way that could increase the golf industry’s revenue by a billion dollars or more. He’s special in a different way. People will come from across the globe with open wallets to see him play. When Tiger is seen drinking Gatorade, the company that manufactures Gatorade believes he will inspire the world to do as well, with open wallets.

That’s why Tiger, through his winnings and endorsements, earned approximately $128,000,000 last year alone.

There are no surprises in the top ten earning athletes:

1. Tiger Woods: $22,902,706 from salary and winnings, $105,000,000 from endorsements
2. Phil Mickelson: $9,372,685 from salary and winnings, $53,000,000 from endorsements
3. LeBron James: $12,455,000 from salary and winnings, $28,000,000 from endorsements
4. Floyd Mayweather Jr.: $20,000,000 from salary and winnings, $20,250,000 from endorsements
5. Kobe Bryant: $19,490,625 from salary and winnings, $16,000,000 from endorsements
6. Shaquille O’Neal: $20,000,000 from salary and winnings, $15,000,000 from endorsements
7. Alex Rodriguez: $29,000,000 from salary and winnings, $6,000,000 from endorsements
8. Kevin Garnett: $22,000,000 from salary and winnings, $9,000,000 from endorsements
9. Peyton Manning: $17,500,000 from salary and winnings, $13,000,000 from endorsements
10. Derek Jeter: $22,000,000 from salary and winnings, $8,000,000 from endorsements

So who of these mass earners have established foundations?

Tiger Woods has the Tiger Woods Foundation. The foundation established the Tiger Woods Learning Center, where children develop their character by learning how to achieve their goals and reach their dreams.

Phil Mickelson runs the Phil and Amy Mickelson Charitable Gift Fund. This charity was a strong supporter of relief efforts following Hurricane Katrina and is a continuing supporter of Homes for Our Troops.

LeBron James is part of the LeBron James Family Foundation. Recently, this foundation has been working to build playgrounds in communities across the United States.

The Floyd Mayweather Jr. Foundation was created last year. This organization seeks to use construction, entrepreneurialism and education to encourage community alliances, youth leadership and stronger families.

In 2003, Kobe Bryant closed down his Kobe Bryant Foundation amidst the athlete’s sexual assault charges. Kobe now runs the Vivo Foundation, “a charitable initiative dedicated to enhancing the lives of young people and making dreams come true through educational and cultural enrichment opportunities and financial support.”

Shaq manages his Real Model Foundation, which has been noted in the press as being an adaptation of the term “role model” but with an emphasis on the idea that role models should be real. Actual details about this foundation and the work they have done is unclear.

Alex Rodriguez and his wife Cynthia run the AROD Family Foundation. The foundation’s mission is “to positively impact families in distress by supporting programs focusing on improved quality of life, education, and mental health. The foundation supports Boys and Girls Clubs events, the Children’s Aid Society, and other organizations.

Kevin Garnett’s foundation is called “4XL – For Excellence in Leadership.” This organization “connects minority high school and college students with business leaders and internet-based guidance, while preparing them for business-related careers and entrepreneurship.” The most recent information about this organization’s activities date back to 2003.

The PeyBack Foundation, run by Peyton Manning, seeks to help disadvantage youth build futures for themselves. This foundation has a strong presence in Indiana, Tennessee, and Louisiana, and also was a significant contributor to relief effort following Hurricane Katrina.

Derek Jeter launched the Turn 2 Foundation, Inc. in 1996. The foundation has awarded more than $8 million in grants since that time. Turn 2’s mission is to “motivate young people to turn away from drugs and alcohol.”

When it comes to foundations run by athletes, Major League Baseball seems to have a great handle on the organizations run by its players. These foundations, like AROD and Turn 2, in addition to the Tiger Woods Foundation, appear to be the most professional and well-managed of all the celebrity foundations. It is surprising to see how much information was not available pertaining to the foundations run by the other athletes.

The Fortunate 50 [Sports Illustrated]

In researching historical and religious views on charitable giving, I came across Maimonides’ hierarchy. He believed that there are 8 degrees of charity. These deal primarily with providing for the poor. Here are his 8 levels, from the highest to lowest. Do you agree with this assessment? How high are you on the list?

1. Investing in a poor person in a manner that they can become self-sufficient.
2. Giving to the poor without knowledge of the recipient and without allowing the recipient to know your identity.
3. Giving to the poor with knowledge of the recipient but without allowing the recipient to know your identity (anonymous giving).
4. Giving to the poor without knowledge of the recipient but allowing the recipient to know your identity.
5. Giving to the poor without or before being asked.
6. Giving to the poor after being asked.
7. Giving to the poor happily but inadequately.
8. Giving to the poor unwillingly.

What do you think?

Doodle Day is more than just a day, it is the set of all days between May 8 and May 18 inclusive. The purpose of naming this period of time is to draw attention to neurofibromatosis (NF), a common neural disorder. May is NF Awareness month, and to participate in Doodle Day, some celebrities are offering drawings and photographs for auction on eBay. All the proceeds go towards NF, Inc. for research for a cure and education about this disorder.

You can browse some of the celebrity offerings here, and I have to say I’m not familiar with all of the artists. If you’re interested in art by Candice Bergen, Jim Davis, Jeff Bridges, or Mickey Dolenz, you can purchase their doodles and support this particular charity. As of last night, the works of art going for the highest prices were created by Seth Green, Neil Gaiman, Gillian Anderson, and Ellen DeGeneres.

Have you ever participated in a charity auction?

At the end of 2007, I contributed $5,000 to a Fidelity Charitable Gift Fund that I created for myself to distribute to non-profit organizations later, once I selected a cause to support. This was a case of really bad timing; since then my account’s value has dropped 6%. Suddenly, I have $300 less to donate to charity. While I am receiving the tax deduction for the full $5,000, unless my account increases at least 6.4%, organizations won’t benefit from the full amount I donated.

I think I need to examine my allocation strategy in the Charitable Gift Fund. Perhaps I should keep the amount I intend to distribute in the coming year in a money market fund within the account, while everything else should be invested for the longer term in a broad stock index fund.

I’ve had charity on my mind lately, and it seems to be affecting what I write about. During my normal reading, I came across a Washington Post article about what is apparently an increase in philanthropy among teenagers and younger children.

Young children and teenagers across the nation are getting involved in philanthropy more than ever, according to research and nonprofit experts, who credit new technologies with the rise of the trend. As young people increasingly become exposed to and connected with the problems of the world via the Internet and television, experts said, parents are finding new ways to instill in their children the value of giving. At the same time, technology is democratizing philanthropy so giving is not only easier for people of all ages and means, but also trendier. And children are starting to organize at the grass-roots level to give…

The scale of money children are raising through new technologies or giving away through charities is “mind-boggling,” said Lucy Bernholz, founder and president of Blueprint Research and Design, a leading consulting firm for nonprofit organizations. “It used to be the pennies we raised through UNICEF boxes, and now you’re talking about 15- and 17-year-old children who are savvy enough and committed enough to raise tens of thousands of dollars and sending it halfway around the world,” Bernholz said.

The article contains many examples of teenagers and children who are outpacing my own giving. According to the research, much of this increase in giving is driven by affluent families who include children in their charity decisions. Philanthropy isn’t just for the affluent, as I’ve discovered lately. In just the Fidelity Charitable Gift Fund, the pool of donors recommended over $1 billion in grants to charities last year. As I’ve written about recently, this type of fund gives smaller-time investors and “thousandaires” like me access to some of the benefits that millionaires have when they create and administer foundations.

I don’t remember knowing much about philanthropy when I was a pre-teenager. I was certainly aware of global issues; Live Aid was a major force back then. I didn’t see myself in a position to support the causes other than buying memorabilia for which proceeds went to support various charities. Thanks to technology, more opportunities for giving are available to more people.

image credit: zugaldia
For Modern Kids, ‘Philanthropy’ Is No Grown-Up Word [Washington Post]
Gift Fund Donors Set Record for Giving in 2007 [Fidelity]

There’s been some discussion on this site recently regarding disclosure of charitable donations. I can understand why some might wish to keep this information private but I’m not at all shy about telling you which organizations I choose to support.

This year, I made donations to the following charities:

• Oceana – The largest international ocean environmental advocacy group dedicated to protecting and restoring the world’s oceans and its sea turtles, sharks, dolphins, whales, endangered species, and marine ecosystems.
• Union of Concerned Scientists – The leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choices.
• Conservation International – Applies innovations in science, economics, policy, and community participation to protect the Earth’s richest regions of plant and animal diversity and demonstrate that human societies can live harmoniously with nature. Works in more than 40 countries on four continents to help people find economic alternatives without harming their natural environments.
• The National Multiple Sclerosis Society – Provides advocacy, professional education, research funding and support for those living with Multiple Sclerosis.
• The Raptor Trust – Provides care and assistance for injured wild birds and aims to educate the public about conservation issues related to birds, especially birds of prey.

  I also made material donations to the Military Order of the Purple Heart Service Foundation, which benefits wounded, disabled, and handicapped veterans.

  But there are a number of other types of donations I’ve made which may not count for tax purposes but count in myriad ways to me:

  I’m an avid Freecycler, and donated over 35 items this year to those who needed them, including a giant standing freezer I gave to a local school for underprivileged children. Apparently this donation will be keeping them in ice cream parties for a long time to come.

  I also save all my egg cartons for a local independent chicken farmer, and have brought over at least 100 cartons this year (I do a lot of baking). Since farmers in my area have a lot to contend with, this bit of recycling helps to keep at least one of the expenses down for a farm which appears to be barely breaking even.

  And then, as always, there’s the active practice of channeling my spending towards organizations and businesses I believe in, using my purchasing power to support their continued growth. For instance, in 2007, 71 percent of my total grocery budget went to support local agriculture and small businesses. I hope to grow this percentage even further in 2008.

  Today’s the last day to donate for the 2007 tax year; did you reach your giving goals?

Last week, I mentioned I met my goal for charitable giving for 2007. The modest goal, which I set for myself at the end of last year, was to provide $1,000 in support of an organization meaningful to me. This year, I decided to separate myself further from the organization I normally support, which also happens to be a former employer. It’s not that I don’t believe in what they do, but I have some issues with their methods.

I want to make sure my money helps an organization reach its stated goal, and I will only give to an organization whose goals, mission statement, and vision match my own values. In addition, it helps to have a strong knowledge of the inner workings of the organization. Unfortunately, it’s this strong knowledge that has turned away from the group I formerly supported.

This past year, I’ve had difficulty coming up with a replacement besides the pfblogs.org Financial Literacy Challenge. This has been a frustration for me, particularly because I wouldn’t mind managing an arts education foundation of some sort. While researching methods for starting a foundation—an endeavor better attempted by someone with millions of dollars ready to be dedicated and willingness to spend a lot of money just to run the foundation—I came across the idea of the charitable gift fund.

The charitable gift fund allows me to make a contribution to a general fund now without specifying a direct recipient. That also allows me to take a tax deduction for the contribution this year while taking my time to decide where the money should go. In the mean time, the funds are invested and presumably appreciated along with the rest of the stock market.

Charitable gift funds, or more specifically donor-advised funds, are organized by several brokerages and public charities. I chose the Fidelity Charitable Gift Fund thanks to its low barrier of entry (only $5,000 to open an account and subsequent investments must be at least $1,000) and its relatively low fees (0.6% including the underlying expense ratios, with a minimum of $100).

In return for the ability to take the tax deduction now, I give up my ability to manage and distribute the funds directly. However, I can recommend grants to charities as long as they are registered under regulation 401©3, and therefore legal non-profit entities. It would be very rare for Fidelity or any other custodian to reject a donee suggested by the donor as long as the organizations are not-for-profit and the donor doesn’t directly benefit from the organization’s receipt of the funds.

When I sent in my $5,000 to establish my donor-advised fund, I selected to invest the money in Fidelity’s Spartan 500 Index Fund (FSMKX), which carries an expense ratio of 0.1%. I could have transferred securities or other assets to the fund, but I opted to send cash. Unfortunately, they don’t support ACH transfers, so I had to write a check. A wire would have cost extra money.

Now that the fund is established, I can suggest grants at any time in amounts of $100 or more. The $5,000 I sent to the Fidelity Charitable Gift Fund is irrevocable, so it can only be used for charity. I’ve surpassed my “stretch goal” of $2,000 for 2007. In the process of establishing the fund, I sort of circumvented the most important part, getting that money into the hands of organizations for their use towards their missions. However, I’ve ensured that once I select recipients I will be contributing more than I would have otherwise.

If you’re interested in starting your own philanthropic endeavors through a charitable gift fund, here are some resources to get you started.

• Fidelity Charitable Gift Fund (minimum of $5,000 to establish an account)
• Vangard Charitable Endowment Program: Donor-Advised Funds (minimum of $25,000 to establish an account)
• National Philanthropic Trust: Independent Charitable Gift Fund (minimum of $25,000 to establish an account)
• Charitable Gift Trusts at The Motley Fool

• You Can Be Your Own Charitable Foundation at MSN Money

  photo credit: johntrainor