Why and What to GiveSubmitted by Affiance Financial on July 24th, 2013
By Steve Lear
This is the second follow-up article in my 2013 series titled “What is the purpose of money now? v.2013.” Here, I will focus on charitable giving.
There are so many reasons for the importance of generosity. They range from the strictly personal—one might even say selfish, to the highly political. Selfishly, to give makes you—the giver—happier. It’s truly “better to give than to receive.” As I stated in my last post, over the course of my 30-plus year career, I’ve found that those who see money as a means by which to help others have the highest level of contentment in their lives.
We also need to address the profound social problems that exist both in our country and around the world. My concern is that if we don’t succeed in making headway, our social problems will lead to increased economic problems, which will lead in turn to social unrest, possible violence, and more social and economic problems. It’s potentially a vicious circle.
Shrinking US middle class
One thing that’s deeply concerning on a local (national) level is the decline of the middle class and the growing income gap between the haves and the have-nots. Income inequality in the US had increased at “an historic rate” since the 1970s.  And “while the income gap between rich and poor has widened astronomically since 1967, the gap between the rich and the middle class has widened the most.”
When I wrote the first version of this article back in 2009, I thought our financial difficulties presented an opportunity to take a good, hard look at our values and ask what is really important. Much of what I said at the time about helping others has not changed. In fact, I regard the following ways to incorporate generosity into our daily lives as “set in stone.”
Guidelines for giving:
- The highest form of helping others is helping someone make a living.
- Give at least 10% of your after-tax income to help others. If you can afford to give 20%, even better.
- If you are retired and no longer have earned income, give 5% of your unearned income and 1% of your net worth annually to charitable endeavors.
- Don’t let your check be your only form of giving. Get involved in your community. We each have a mandate to repair the world. For some, giving money may not be an option. If so, give time. Please don't deprive yourself of the physic income you'll get from volunteer work. The more you help others, the better you'll feel.
- Give before being asked.
- Ask others to give; it compounds your own gift and gives others the chance to do something good, important, and necessary for themselves and for others.
- Make your payments monthly. It’s easier and it helps the recipient organizations with their cash flow.
- Consider capping your wealth accumulation. Once you have enough money to live comfortably for the rest of your life, and you have secured your desired financial legacy to your loved ones, consider giving the rest of your money to the community. Many find that increasing their giving creates far more contentment than increasing their possessions.
- Consider reducing your wealth cap. Reconsider the amount that you need to leave to the next generation. There is a difference between making sure your children are cared for and making your children wealthy through inheritance, rather than through their own hard work.
- Always remember: You can’t take it with you. It’s not true that “He who dies with the most toys wins.”
The views and opinions shared in this article are strictly those of Steve Lear and do not represent Affiance Financial or Cetera. Further, nothing in this article should be viewed as financial advice. Please consult with your financial professional.