Happy New Year! The Holidays – a great (if not a little stressful) time of the year. Filled with family, eating, and giving presents. Also a time to pass some of our financial blessings along to less fortunate people, maybe.
There is something that feels right about giving to the needy. There are tax benefits; there are value-based / church reasons. But honestly, it hurts to give those hard-earned dollars away. What if you need the cash later, or what if the recipient is undeserving? And many of the groups advocating charitable giving are charities themselves.
I’ve spent a good amount of time trying to figure out how much of I should give to charity each year. I have struggled with it. Ultimately, I think we should all give – the amount is certainly a personal decision.
Here is my winding path to getting to this conclusion, and an overview of several questions that helped me think through the topic:
Church, Should I Give? (Predictable answer)
With generosity being a value, it makes sense that religion (if a person is religious) would provide guidance on this topic (since religion defines values). Also, the most direct advice I could find on giving is found in religion. For me, Christianity. The Good Book points to a tithe of 10% of income, then also to qualitative amounts of sacrificial giving beyond the tithe. I believe the Bible & agree with it’s reasoning on giving to charity*.
My problem is that a religious organization is incentivized for its members to give: it needs donations to function. My skepticism falls on the fallible people within the organization. Really, any incentivized people (including within the church) with a self-serving message. Being cynical, the truth may be spun some by those who would benefit. So I wanted to get an answer on the giving topic on a another, non-religious basis.
Self, Should I Give? (Difficult to get an answer)
I tried to answer this personally & internally. The choice on giving comes down to…should I:
- Spend this dollar on myself today?
- Save this dollar and try to grow it for tomorrow?
- Give it away today for another person in need?
My internal debate usually ends in some version of a stalemate.
Altruistic-me starts by thinking I’ve been blessed with enough to share with the less fortunate. Selfish-me then clouds things by saying that saving could really be for someone else’s benefit in the future. Then he continues: saving is so much better than spending that it must be inherently good. Pragmatic-me steps in that giving will actually benefit me by helping my esteem in the long run. But maybe wait a bit, because there risks and downsides in the future. Future-me may be less greedy and self-centered anyway; then I can give.
I realized that my internal argument is pointless. Selfish-me is at least as smart as Altruistic-me, and much scrappier. Pragmatic-me is too much of a robot accountant to be trusted.
C. Self, Should Someone Else Give? (Much easier to answer)
I broke the stalemate by replacing those 3 me’s with Judgmental-me. (He always knows best anyway) However, Judgmental-me does his best work on others. So I asked some slightly different questions to Judgmental-me. And what do you know, he figured it out!
- What do I most want in life for someone I love dearly?
- How does money fit into this picture?
- What amount of money would I have him/her save and give if he/she was roughly in my shoes today?
- Should I follow that same advice? (Best to keep this on a secret list so I don’t throw the debate)
1. What do I want in life for someone I love?
I love my son** unconditionally. What do I want for him? Here is what poured out of my keyboard in stream of consciousness:
I want for him to live a fulfilled and happy life. I want him to understand enough and mostly have that. To struggle but only to the extent needed to build character. To make mistakes and grow into a critical-thinking man of character. To not let any one thing own him, but understand and excel in his various dimensions of life (son, brother, friend, husband, father, worker, etc). To work hard, try, and accomplish.
I wish for him to have faith in Christ and in things larger than himself. I wish for him to have hope in himself, others, and the future. Most importantly I wish for him to know, give, and receive love.
2. How does money factor into this ideal?
Money wasn’t really mentioned! I didn’t wish for him to be loaded when I forced myself to write down my first thoughts. Money factors into this picture as it was originally conceived: as a means to obtain something: enough.
Specifically I wished him to know and “mostly have enough”. Most importantly in my opinion is for him to understand that enough isn’t synonymous with more. You can clearly have too much of material things. So I would like him to figure out his personal enough, then go out and achieve that. Maybe a little extra for contingency and a little extra for others.
I want him to work hard for his enough. Be challenged to learn about the world and himself. To prevail, and ultimately provide for his family. Through that: understand, remember, help, and truly love those who are less fortunate. Those people can be friends, family, or strangers. They (many times want, but) don’t always need your money. They could usually at least use a hand. And having earned his enough will leave capacity to help as needed.
3. What amount would I have him save vs give in my shoes?
I would have him save at least 50% of his take-home pay after a couple of years working. (Maybe make some mistakes, have some short term fun, and blow some money that first year or two) Once he is a decade or more into his salary, he should have been able to grow that savings percentage even above 50%.
Regarding amounts, I would have him give consideration to a couple of options: how much he earns, how much he uses, and how much matters to him. Specifically:
- 10% of his income
- 20% of his spending
- An amount that gets his attention
10% of income seems like a sound, historically recommended amount. A good place to start. I also like to tie in spending. And given that I recommended that he save 50% of his income, 20% of his spending would be natural amount to give in that scenario. It gives hime another reason not to spend a ton of his income (because he’d have to give more). And I would wrap it all up with a qualifier: if he is making a killing, then make sure his giving matters to him. I think 10% of income will do it, but you never know.
I don’t think this is an exact recipe for all situations or all seasons of life. Really, all 3 should be the goal. But at least hit a few of them. And at all times, give from a place of gratitude. He could not be where he is, or achieve what he may be achieving, without help from others. Some of those others could really use a loving hand of help.
Most importantly, I would have him give something. Understand that his heart will follow the path of his money. Make the act of giving a habit. Pay attention to where he gives. Learn about the particular cause. Meet the people that are helped. If this doesn’t move him, then give to another cause until he finds a passion.
Ideally, as he saves up to his enough, hopefully he can carve out for others what is more valuable than money: his time.
4. Should I (Do I) follow that same advice?
Trade “I” for “he” throughout this, and I might have some good advice for myself to take into 2016.
2015 was an inward-facing, somewhat selfish year. I’m ok with that – seasons of life. New baby, no sleep, and some health issues. I wouldn’t have traded away the year, but don’t necessarily want to make each piece an annual habit. Giving a little more will probably help the mental reset as we try to adjust the course a bit.
We currently give. It gets our attention, and is above 20% of our spending. But it’s grown more with inflation than in step with our income. So moving up to 10% income is a goal, and it will stretch us some. We have some personal plans to grow giving for 2016 vs 2015 based on pledges, tax reasons, etc. Hopefully putting the goals out there will help us follow through.
Readers: Do you have a similar or different way of looking at charitable giving? Please comment below.
*To keep this post from being a bible study, I thought this might be best in a note. The Bible basically says that God doesn’t need my money (which makes sense), but that my heart will follow the path of my money. In other words, my interests will tend to align with where I spend my money. So God suggests that we give a portion of our resources (time & money) to the needy out of love and gratitude for our blessings.
**I love both sons the same (depending on the hour, maybe) – but using my 3 year old in this example. It wouldn’t make as much sense to claim that my 1 year old explained this topic, because he can’t even really talk.