For those who are very busy, even important things will sometimes fall through the cracks. In Ahron Binick’s case, that something was his personal bookkeeping: his bills and checks were all over the place. In a recent meeting, however, his rav pointed out that being sloppy with his ma’aser accounting wasn’t acceptable. Ahron was pretty sure he gave even more than ma’aser of his income to tzedakah every year, but the numbers were in his head, so he couldn’t be certain. With Purim right around the corner and his rav’s words ringing in his ears, it seemed like the right time to get his tzedakah in order, and he decided to look for a system to track his ma’aser calculations.
What systems and tools can Ahron use to clean up and maintain his tzedakah account?
Keeping It Simple
While Purim is a Yom Tov of giving, tzedakah is a year-round requirement. Giving ma’aser (10%) of one’s income is an important obligation which reaps many benefits for the giver, but it requires keeping track of one’s earnings and tzedakah expenditures. While there are many ways to do so, often the simplest methods are the best. In days of old, when there weren’t other options, all tzedakah was probably tracked using paper and pen. Indeed, there are many stories about the handwritten tzedakah ledgers of tzaddikim and how Hashem miraculously brought them back into balance when they were overdrawn. One such story in the well-known book All for The Boss mentions how Rabbi Herman zt”l used red ink for calculating the money he owed and blue ink for the amounts paid. A color-coded written or typed list of obligations and donations can work just as well in the 21st century.
The Envelope Budgeting System
Another low-tech but useful method is the envelope budgeting system. The idea of envelope budgeting is proactively planning where your money is going. Using cash or checks, each paycheck is divided into envelopes: one for housing, one for food, one for car expenses, one for savings, etc. This forces focus and discipline with regard to spending: if an envelope is running low you must skimp until it’s refilled. Though this strategy may seem a bit drastic to some, many people who’ve had trouble with overspending appreciate the discipline inherent in this basic system. While Ahron may not be interested in envelope budgeting for everything, he can do it just for his ma’aser. Every time he takes out income from his business he can write checks in various amounts totaling 10% of the income (leaving the “to” line blank). Having everything pre-filled out can work especially well on Purim, when things are so busy and people are tipsy!
For those comfortable with technology, good personal accounting has never been easier. First, an Excel spreadsheet is today’s standard way to calculate numbers. As long as you are disciplined enough to update it as needed, Excel is a very powerful electronic “notebook” (and much more). But because Ahron is so busy, he may want to use an automated app or software to do the data entry for him. Two popular programs, Mint and YNAB, automatically sync with your bank accounts and categorize income and expenditures. There are several minor differences between them (mainly that Mint is free vs. YNAB costing a few dollars a month), but both are secure and very easy to set up and use. Using modern technology, Ahron’s ma’aser obligations and payments can be organized very accurately and speedily. In fact, once he gets used to using these programs to track his tzedakah, his personal budget will likely become a lot more organized as well!
While notebooks and software programs will meet the needs of most people, those with larger amounts of charity to give out should explore opening a donor-advised fund (DAF), an extremely convenient tool to manage charitable giving and tax deductions. A DAF is a tax-deductible account into which you deposit your tzedakah money to be forwarded to charities of your choice. Large investment companies and charities maintain master DAF charities within which all money donated is held in separate donor accounts. As they see fit, donors can instruct the master charity to forward donations out of their account to other charities of the donor’s choice. All charitable contributions made via a DAF show up in one statement, eliminating the need during tax season to chase down dozens or hundreds of receipts. The reason for this is that from the IRS’s perspective the donation occurs immediately when the money is deposited into the master DAF, not when funds are forwarded to the many individual charities.
This arrangement can work very well for people like Ahron. By donating 10% of his income to one place, his DAF account, he will get an immediate tax deduction and ensure that his ma’aser is separated and tracked. Then, over time, he can have the DAF disburse the money to his favorite mosdos or organizations with no paperwork or hassle. DAF minimum account sizes begin at $5,000 and the fees are minimal, so they can be a good choice for many people.
DAF: Keep in Mind
While DAFs are a very flexible and valuable tool, there are a few things to keep in mind. First, once the money goes into the DAF there is no going back; it is already donated. Also, the DAF route doesn’t allow for giving on the spot or to needy individuals; the check is sent directly from the DAF to a recognized charity organization. This takes away some of the personal touch in tzedakah and often makes DAFs impractical for matanos l’evyonim. However, if it can help Ahron keep his ma’aser tracking orderly, the DAF will still be helping him enjoy a freilich and kosher Purim.
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