The Case for Charitable Giving
Written by Tad Kastman. Tad is a Certified Financial Planner™ and QA Wealth Management Advisor.
Here are three reasons why you may consider Charitable Giving.
1. Giving Can Reflect Your Values and Your Perspective
You may have heard the famous saying “where your treasure is, there your heart will be also”. This connection intuitively makes sense to us – we invest our time and money on the things that matter most to us.
To align our resources with our values it is important to be intentional and develop a plan for our charitable giving. Otherwise, it can all too easily flow to other things. Even a modest realignment of resources may have a big impact.
2. Generosity May Improve Your Well Being
There is a prevailing idea constantly before us that we are one purchase away from finding true happiness. Advertising powers would have us think that the inherent problem is a lack of stuff. However, the pandemic has created an opportunity to reflect and refocus our priorities. I’d venture to guess that those thoughts may be centered around things money can’t buy – family, friends, and causes near to your heart. These are the types of things that may bring more joy and a greater sense of satisfaction to your life.
The good news is redirecting resources toward helping those in need may be good for both your health and wealth. Research shows that generosity produces not only better mental health, but also improved physical health, including lower blood pressure and longer lives. As if better health wasn’t enough reason to be generous, studies have also shown a correlation between generosity and net worth. Why? While no definitive conclusion was reached, it’s not a stretch to think a happy, healthy and purposely charitable person might live longer, save more and build greater wealth.
3. Your Giving Could Change a Life
An estimated 9.2% of the world’s population lives in extreme poverty, living on less than $1.90/day. That’s nearly 700 million people. Many more are struggling to pay their rent or mortgage due to a job loss, poor health or other factors. In these cases, the impact of a $100 or $1000 charitable gift can be very meaningful to someone in that situation. Or perhaps you’re passionate about giving resources to an educational, civic or social non-profit institution. These organizations can have an outsized impact on a community through jobs, education, and healthy entertainment outlets.
Most of us have been on the receiving end of a timely gift that helped get us through a tough time. In the midst of a pandemic, there are needs all around us. While there’s no guarantee that donating your time or money will have a huge or immediate impact, it may add to your well-being and we as a society will benefit one way or another.
Where do we go from here?
As part of this month’s focus on charitable giving, we will follow up with a practical article on how to combine your charitable giving strategy with smart tax management, through the vehicle of a donor advised fund.
In the meantime, please feel free to call your advisor to discuss how we can help support a charitable giving strategy you might have in mind.