I made a mistake, and I should have known better.

Last year, I struggled with coming up with a needy non-profit organization that I felt I should support through charitable giving. The indecision stems from the desire to contribute to an organization with a mission that reflected one of my passions and the lack of quality non-profits that fill that niche. By the end of the year, I decided to provide money to the Fidelity Charitable Gift Fund, which would allow me to distribute or grant my funds to the recipients I choose at a later date.

I invested these funds like I normally do. With the $5,000 I provided to fund my “mini-foundation” in December 2007, I invested in a broad market index fund. Considering I intended to use these funds, or at least a portion of these funds, throughout 2008, I shouldn’t have chosen to invest in the stock market. I should have left the money in a money market account within the Charitable Gift Fund. The account would have grown to about $5,200 by the end of December 2008 if left alone.

At this time, the account’s value is a little over $4,000, having lost about 20% so far this year. That’s $1,000 less that I have to donate to a worthy organization because I couldn’t find the right match—possibly a procrastination—and because I invested without considering my time horizon for these particular funds.

Now I feel as if I need to leave the money in there until the market recovers its losses from the last year, but it could be a long time before the index fund increases 25% from today. My goal before the end of the year is to finally select an organization worthy of my continued support and pay them directly from my available cash rather than from the Charitable Gift Fund. I’ll also continue to contribute to the Fund but I’ll set some funds aside for short-term charitable giving in addition to continuing to invest in the stock market index fund for longer-term growth.

Kiva is an international non-profit organization that facilitates “microlending” for the purpose of its mission, alleviating poverty across the world. The organization allows those who wish to contribute to lend money in small amounts to entrepreneurs in the developing world. Kiva’s website lets you browse entrepreneurs’ profiles to select the recipient of your micro-loan and allows you to make that loan. The terms of the loan are generally 6 to 12 months. Kiva claims that repayment rates are 99.7%, so there is very little risk of default.

Even with the potential for earning interest as a lender, I’d be careful about including microlending as an important part of an investment portfolio. It might be best to lend money only with amounts you don’t mind losing. Despite success stories—Endless Gibberish is “addicted” to Kiva and has lent over $20,000—there is always a risk.

For anyone who finds Kiva to be a valuable resource, the Kiva BusinessCard, a credit card offered by Advanta, is an excellent choice. This is the only credit card I’ve encountered that is geared towards philanthropy. The Kiva BusinessCard matches your Kiva contribution (when placed on the credit card) dollar for dollar, up to $200 each month. Your contribution has twice the power. This match is considered a grant, however, and not part of your microloan. When the loan is repaid, you will only receive the amount of your contribution, not including the match. The matching portion will be paid back to Advanta.

Additionally, the card offers an 5% cash back rebate in the form of a statement credit for grants to Kiva, charitable donations, and some expense categories, up to $1,200 in charges to the card. Beyond that $1,200 limit, and in other expense categories, the program offers a cash back rebate of up to 1% on all other purchases. The total cash back you receive is unlimited. The cash back incentive for charitable donations is an excellent idea; to loan $100 to Kiva or donate $100 to your favorite non-profit, it will only cost you $95 (after you receive your credit).

That same $95 you spent on a $100 microloan provides the recipient with $200, thanks to Advanta’s matching grant.

Like other business credit cards, you don’t have to be a business in order to apply and be approved for this credit card.

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?

You’ve seen it before. Perhaps you’re watching the Academy Awards and expecting the winner of Best Supporting Access to give a quick acceptance speech thanking her cast, director, crew, and family, but perhaps she takes more time to pontificate about human rights, war, or politics. Most people I know groan when yet another entertainment superstar shares his opinion about issues unrelated to acting, singing or dancing. But skills in entertainment may not always preclude intelligence or sincerity.

Tom Hanks knew this when he published his stump video for Barack Obama on Youtube. He says sarcastically, “As an official celebrity, I know my endorsement has just made your mind up for you.” (Hanks managed to slip into his endorsement a mention of George Washington’s transference of power to John Adams, an event recently depicted in the John Adams miniseries he recently produced for HBO, but perhaps that is beside the point.)

I like Tom Hanks’ approach. By posting a Youtube video, he is not forcing anyone to listen to his message; those who are interested can seek it out. Additionally, I find Tom Hanks to appear to be an intelligent figure in entertainment, always making smart and challenging choices in his own career. I would then extrapolate and assume that he is likely just as intelligent with other decisions as well. But his argument in favor of any presidential candidate is only as persuasive to me as I want it to be.

This is just a recent example, but there is no doubt that it is common for celebrities to use their voice and popularity to bring awareness to a human rights or political cause. Perhaps the type of popularity in which individuals have the ability to reach an audience of millions instills responsibility or desire to reach people in a way that not many others can. Anyone in their place who cares about an issue would regret not bringing awareness before they no longer have the ears of a wide audience if given the fleeting chance.

I believe that anyone with the ability to communicate to millions of people and touch so many lives has the responsibility to raise awareness to important issues. However, the most uncouth outbursts at an inappropriate time (think Michael Moore at the Oscars blasting President Bush) make the celebrity seem like a jerk for using their status to spread their message and take attention away from the issue and place it on the celebrity. Don’t forget that celebrities all along the political spectrum use their status for awareness, including Charlton Heston with his From My Cold, Dead Hands call as chairman of the National Rifle Association.

Should celebrities just shut up and entertain us, or does great responsibility follow great popularity? Is it right for some celebrities but not others, or is it the timing or situation that makes the message acceptable to hear? Or do you believe only the celebrities who agree with you should have the opportunity to speak out for issues that they find important?

Photo credits: Alan Light and Legendary Classic

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.