Should We Donate to Church or a Charity When in Debt?

05/19/2015 11:05 am ET | Updated May 19, 2016

I've been helping people with problem debt for decades and for that entire time, a constant question has been the guilt or demand to donate when dealing with debt. It's a loaded subject.

For example, those who feel compelled to donate first to their religious organization feel a moral imperative to do so. Yet others feel people have a moral imperative to first repay creditors. Which choice is more moral? See, it's a damn slippery slope. Neither is but both are just as important. Or are they?

What about the need to donate to yourself for retirement? That's important too. See my cost of getting out of debt calculator to see what those donations will cost you in lost retirement income.

But recently Howard Dvorkin of published a great Q&A on this very subject and he gave some great advice about how to evaluate who you give money too. It's a tip I'm aware of but I would never have thought about writing about.

Here is what Howard had to say.

Should You Keep Donating to Charity if You're Broke?

As chairman of, I answer many reader questions about money. However, those questions often involve... love.

That shouldn't surprise anyone who knows that couples fight often about money. I'd guess that half my questions fall into this category. Here's one I just received the other day:

Question: "My wife and I are finally trying to buckle down and fix out finances. We have around $7,000 on two credit cards, and we've drawn up a really tight family budget. We've each given up stuff we really like -- craft beer for me, premium cable channels for her. But she still wants to give money to every charity that mails us something, especially if they come with a magnetic calendar for the fridge or return-address labels. We spend a couple hundred dollars a year on this, but she says it's off the table. I say it's ON the table. What do you say?"

Answer: I believe you should give to charity with the same scrutiny you're giving to your budget.

In other words, you can learn how to spend wisely, you can learn how to save wisely -- and you can learn how to donate wisely.

I applaud your wife for wanting to help people. She's not alone. Just this month, a study from TD Bank showed, "72 percent of Americans said they would be happy to donate loose coins each week to support a favorite cause," while "94 percent are willing to sacrifice personal spending (on new clothing, coffee or a meal out) to support a charitable cause."

However, donating to charity by simply stuffing a check in an envelope that comes to your door isn't the proper way to be charitable. How much do you really know about these places? Think about it this way: You don't buy clothes without trying them on first.

Just as you've devised a spending plan, do the same for your charitable giving. The TD Bank survey shows 72 percent of want to "assist local charities over national or international causes." Why? One reason is to simply see the effects of your money in action.

I'd also recommend you check out Charity Navigator. This site offers a wealth of information on a charity's financial health and its transparency. For instance, I'm a big fan of Junior Achievement, so I checked out its Charity Navigator page and found a four-star rating and a 94.59 out of 100.

Finally, I'd set a dollar limit on how much you can afford to give to charity each year, then take some time ensuring you're spending wisely on the charities whose causes move you. Remember, you should stretch every dollar not only on what you spend for yourself and your family, but for what you spend on others, too.

Howard Dvorkin is a CPA and chairman of, an educational resource for those who want to conquer all forms of debt in their lives.