How to Think About Financial Giving in a Crisis

Tips for bucketing your giving budget and prioritizing among the buckets.

By Caroline Barlerin

This is Part 2 of our series on giving during a crisis. Part 1 was an overview about how we think about giving broadly, and what it means during a major crisis like a global pandemic. This post focuses on financial giving in particular.

As we’ve seen during emergencies such as COVID-19, although we were all facing a crisis, it disproportionately harmed people who were already marginalized in our society. So as we think about where to give, we must think about giving not just from the lens of equality, but from the lens of equity.

When considering how to give, I like to start with a concept borrowed from personal finance: bucketing. Considering the time horizon of the impact you are trying to make is a simple way to prioritize how you allocate your giving dollars. By grouping your giving according to short-, middle-, and long-term impact, you can apply the same concept of “bucketing” to your giving budget.

Bucket Your Giving Budget

First things first, it’s good to consider your giving budget on an annual basis and have a ballpark estimate of what you can afford to give each year. You will also find that doing so makes you more generous: If you’ve already committed to giving a certain amount and are giving within that budget, you won’t be considering individual contributions from a loss-aversion perspective. Plus, it streamlines your decision-making process and helps you steer clear of decision fatigue.

Commit a percentage of your annual giving budget for middle- and long-term impact.
It’s a good personal finance practice to automate a certain percent of your monthly income to savings if you can. Within that, many experts advise separating into a bucket for “rainy day savings” and another for “savings toward a specific goal” like a down payment on a house.

Using the same approach, it’s good to automate some of your giving to middle and long term. Pick a percentage of your annual giving budget and then divide that among the long-term, systems-change causes you believe in.

“By bucketing your giving, you can ensure you’ll have some baseline level of impact to causes you’ve decided are important to you.”

Committing to a recurring, set donation is also a good practice because it allows the recipient organization(s) to plan and budget more effectively, increasing their efficacy and ultimately boosting the impact of your dollars.

By bucketing your giving in this way, you can ensure you’ll have some baseline level of impact to causes you’ve decided are important to you, while still reserving the flexibility to give in response to a specific crisis.

How Can You Prioritize Giving Within Each of These Buckets?

Short Term: 0–6 Months:

Direct Services: When we are at or approaching the peak of a crisis, I encourage anyone who is able to give to focus your short-term giving toward organizations providing direct services and direct financial support to people in need. Direct services are generally proven interventions, so the short-term impact of your giving is both predictable and meaningful. For instance, $20 to your local food bank pays for a set number of meals for a local family. Direct services help put out the immediate fires.

Middle term: 6-18 Months

Even in a crisis, it’s still vital to designate some of your giving budget for political and systems-change efforts with middle- or longer-term impact.

Systems Change: Supporting the work of advocacy and watchdog organizations can help hold leaders accountable to ensure government support is accessible to everyone who needs it throughout a crisis and recovery.

Politics: Crises such as COVID-19 have shown the far-reaching implications of social and health policy while highlighting the importance of effective, responsible leadership at all levels of government. Political giving is important and impactful in a crisis.

Long Term: 18 Months +

Those who have the means to do so should include innovation in your giving budget. By nature, investing in innovation means giving money toward unproven solutions. However, the payoff to society can be tremendous.

Innovation: A major crisis can be a huge global reset and a time where we need resilience and redefinition of what the future will look like. For example, during COVID, I was inspired by companies that redeployed their people to respond short-term to urgent needs like making face masks or hand sanitizer, but I was also curious about organizations doing the longer-term collective impact work to re-invigorate our cities and rebuild community trust.

What are the orgs in this category for you?

There are almost certainly local efforts and funds in your area—and again, I encourage you to support the most vulnerable in your local community. Proximity matters!