What would you do if you won the lottery? If you’re like many people, you may already have a partially composed list featuring hot-ticket items like a luxurious vacation, a sports car, or a dream house. Then some portion of the rest of it will go to charity, right?
Giving to charity doesn’t always make it to the top of the list when we’re looking at our budgets or analyzing our spending, particularly if you feel like you’re living paycheck to paycheck, or just a little above. A lot of times, giving ends up being an afterthought. We do it at the end of the year, tossing $20 here or there in the spirit of the season. Or, we do it for tax reasons: We decide that we want to make a tax-deductible gift to our alma mater, favorite public radio station, or a charity whose work is aligned with our values.
We all think that we will give lots of money away to charity one day when we are rich, but the truth is that we would be happier giving some of it away all of our lives. After all, here in the United States, our idea of what “rich” is can seem pretty hyperbolic compared with the rest of the world. Enter your annual income into this Global Rich List calculator to see where you rank among the world’s rich.
Feeling richer already?
Even without the lottery win, knowing that you have enough to share with others can make you feel richer and more grateful for what you do have. Increasingly, research affirms the idea that giving makes the giver feel happier.
I’m not suggesting that anyone give more than they can afford or that they give willy-nilly whenever the mood strikes. Planning for giving and doing a little research to get the most effective bang for your charity buck is important.
Planned giving can have a positive impact on the cause that you champion, and, more often than not, it also benefits you psychologically, socially, and financially. For example, Bill and Melinda Gates give away billions each year, yet the following year their net worth rises far more than the massive amounts that they give. The same is true for Warren Buffett.
Sure, you might say, those billionaires’ wealth also increases with increased sales of Microsoft products and the rise of the stock market, but recent studies on giving and wealth have shown not only that people who have more, give more, but also that people who give more acquire more wealth. Using data from The Social Capital Community Benchmark Survey, researchers found that, even excluding the mega-rich, people within the same income level who give charitably make more money than those who don’t. A side benefit of getting involved with charitable organizations is that it can expand both your social and professional networks. A fellow business owner in your area might be more inclined to send referrals your way knowing that you both support the same kinds of causes.
Many religions use the practice of tithing to encourage regular, consistent giving. I think that the secular world would benefit from a similar idea. What if, instead of suddenly giving small gifts when we’re in a generous mood, we put a little aside every month to either consistently give throughout the year (which many charities prefer since it can streamline costs and helps them plan more effectively), or to be able to give a larger amount at once towards the end of the year. Setting up an automatic transfer from your checking account into a “Giving” savings account could be as painless as putting aside $10 to $50 monthly — money that you probably would have spent on small things you wouldn’t remember a week later. If you do that, you could have between $120 to $600 by the end of the year to give.
Giving in this way is usually a more effective strategy than giving change on the street or even putting change into a collection can at the grocery store. If education is most important to you, you can go on Donors Choose and pick out a classroom and a project. If empowering female entrepreneurs in third-world countries is where you want your money to go, you can start an account with Kiva and regularly pick different women with different businesses to support with microloans. If you aren’t sure where to start, you can also use websites like Charity Navigator, Giving What We Can, and Give Well to find out more about the most effective and efficient uses of donations, as well as where the need is greatest.
We’ve all heard that it’s better to give than receive, but now we really do have the research to prove it — and the resources to make sure our generosity is put to the most effective use. Learning how to give strategically can help us feel like we really are effecting positive changes and making the world a better place.
Jennifer Turrell is a member of the DailyWorth Connect program. Read more about the program here.