Investing in charity
Every man shall give as he is able, according to the blessing of the Lord thy God which He hath given thee. ~ Deut. 16:17
Charity is no easy subject, it is neither black nor white and there are certainly no right or wrong answers when discussing the subject. Since the end of my school days, it is a subject I have spent a good deal of time thinking about. And I am still uncertain as to what is the best approach to take”¦ So, I thought writing about the subject and getting your input would be a good start to getting a better perspective of the subject. There are obviously many different ways to help, but in this post I will only be discussing the financial aspect of charity.
Why would I give?
There are many different reasons why I personally have thought about giving. Having travelled abroad and seen different situations in the World is probably at the top of my list. There is no doubt that even a few days in a poor country in Africa changes a person’s point of view drastically. How can we complain about not having the latest IPod when you’ve been to a village where eating two meals in the same day is a luxury? That is not to say that I don’t complain anymore of course… But it does change the way I perceive things.
Over the years, I’ve also become a believer in the fact that even one person can make our world a better place. It is like a domino… Helping one person can help their family and they might help others. It’s a cycle and I think that it is true; one person can improve this world and I’m hoping to do just that.
Should I be giving?
The troubling question remains: Should I be giving if I still have debts to pay off? Or, a house to buy? Or a trip planned? Should I only be giving once if I become part of the millionaire’s club? There are obviously no just answers to these questions and I’m not convinced what the typical answers might be. Personally, I’ve been working full time for a number of years now and feel like the time is right to get started.
I will be starting to work on a plan for 2010 at which point I will be “making a bigger difference to improve our world”. Should I be giving while I’m still paying rent? You could easily argue that I shouldn’t. However, I feel like that argument could easily postpone giving to charity by a few decades with new excuses replacing old ones as time passes. Because of that, I personally feel I should start in January 2010.
Can I make a difference?
I used to ask myself the question but no longer. Truth is that depending on the cause you are looking to help, even a few dollars can make a difference. For example, think about how an organization such as Unicef can help children with small donations. I’ve seen many stories about how even little amounts can change lives.
Hearing about people like Warren Buffet giving tens of billions of dollars can make our $100 contribution feel small. But the truth is that millions of us getting together to fight for a cause will always generate remarkable results…
A simple mosquito net in Africa can prevent someone, perhaps an entire family, from contracting malaria which would have a huge impact on their futures. I’ve seen many leaders talk about this because it is disappointing that we cannot even gather enough money to rid the World of this preventable disease.
How should I structure my donations?
This, to me, is a big one. There are so many ways to get it done. Most choose to simply wait for a good opportunity and give when it feels like the right time. That can work perfectly well of course, yet I personally prefer to set up something that is a little more structured.
First decision was that instead of deciding on a flat amount to give out, I will be giving a very small percentage of my income. I prefer choosing a small amount because it will be much easier to raise it in the future instead of then scaling it back. So, let’s say I give 1% of my income.
Then, instead of simply doling it out, I will open an account for that money. Every year the objective would be to give out 50% of the contributions and 50% of the “investment profits”
For example, if after year one, I had set aside $1000 and earned $20 of interest, I would give $510 (50%x1000$+50%x20$). The objective of course would be to have $510 in that account. Over the years, that amount will hopefully grow to ensure that I can give out a little bit more every year. It will, naturally, take a long time to have a great amount but you have to start somewhere don’t you?
And yes, at some point, it might be worth considering creating a legal entity to manage the money, simply to avoid paying taxes on the income”¦ it will be a long road, but I think it will be possible to make a difference even next year, but probably even more so 10, 20 or 50 years from now…
Who deserves my money and time?
This is the most interesting question of all, isn’t it? There are so many possibilities”¦ Giving to local charities, our alma mater, to international organizations, for children, hospitals, etc, etc. I personally have not yet decided but will probably choose 1-2 organizations that I believe in and start that way. Obviously, as with everything else, I will be re-evaluating the situation on an annual basis”¦
With all this having been said: I would really like to get your opinion on charity, do you give? If so, which organizations have you helped? Why? How are you set up?
image source: Mr. Kris