Investing in charity

By Mike

chariy

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


16 Responses (including trackbacks) to “Investing in charity”

  1. James Says:

    WOOOWWW that’s an inspiring post. It’s great that you want to donate. We really appreciate you taking the time to share your motivation with us.

    I wish I can have money to give. I think it’s a good moment to give them our help. Money, time and dedication. It’s never too late!

  2. Gina Says:

    Great post!

    Since 1993 I have given my time to various organizations (local food bank, tutoring elementary school students, annual arts festival) throughout the year. I donate my time because I don’t have the money to give. Once I am out of debt (in 2 yrs), I’ll be able to give $$$.

  3. OneDay Says:

    I currently give money to my university, my alma mater. Even though I would like to give more money, I am happy that my company redistributes, in the form of donations, a certain percentage of its annual earnings. They invest in an international orphan children’s Fund which is for me a great contribution for the society :)

  4. Zavi Says:

    OneDay- I don’t know if it’s the same thing, but investing in a foreign charity donations are not tax deductible expenses in Canada, companies still donate but less the tax portion. For example, if the tax benefit is worth $1000 then companies would give the amount pledged minus the $1000 tax benefit… I think it’s a great idea!

  5. Frank Says:

    Somtimes I’m afraid to donate to charities for fear of it being a scam… Or I wonder where the money is REALLY going… How much of my donation is spent on administrative costs? These questions are crucial. It is sooo important to take the time to research the charity before you gave them your money!

  6. Susie G Says:

    Great post! Being kind of a math nerd, I love your plan to donate while setting up a sort of perpetual fund. My one bit of advice on donating is it’s better to give a lot to one charity than a little to many. My husband donated a lot of money once in small bits and it generated so much mail he felt all his money was wasted.

  7. Rob Says:

    Charity is for suckers.

  8. Becky@FamilyandFinances Says:

    For those worried about whether your donations are being spent responsibly, check out this great website:
    http://www.charitynavigator.org/

    This is going to come across harsh, and I don’t mean it to be, but why is there no mention on tithing here? This used to be a Christian blog. There are even posts in the archives about tithing:

    http://www.gatherlittlebylittle.com/2008/07/ten-benefits-of-tithing/
    http://www.gatherlittlebylittle.com/2008/03/joyful-sacrificial-tithing/

    I guess I’m just a little disappointed in how this post was written. We may not be under the Old Testament Law and required to tithe 10%, but we’re definitely required to give. Personally, I think 10% should be everyone’s goal (Christians, that is).

    Also, I don’t believe that debt or anything else should be an excuse to not give. I’ve heard countless stories of people who have put their faith into action and trusted God to provide by tithing while they were still in debt. These people are always blessed for their faithfulness, more than they ever thought possible.

    Just my 2 cents!

  9. shelley Says:

    I’ve been a tither and giver for over 15 years. I am still under the poverty line with 6 dependants. I give to my church because I can trust where my money goes. We have a large overseas ministry, and have blessed many pastors by buying them motorcycles; we’ve dug wells; built churches; gave to orphans at Christmas time; gave money for operations, etc. I tithe and give about 15% of my income, plus at Passover, Pentecost, and Tabernacles give my best offering to my pastor, as well as First Fruits offerings. I’ve given oodles of clothes, household goods, etc. plus a car and helped give to other families to buy cars. God has prospered me from $621/mo. to almost $40,000/yr. Because of faithful tithing and giving, I have paid off my house and over $15,000 in credit card debt by God prospering me because I’m a giver. God cannot do w/out a cheerful giver!! I’d love to become like Oral Roberts, who increased his giving more and more until he was living off of 10% of his income and giving God the 90%!!! Thank you Jesus for prospering me!! I get my bills paid by giving!! Praise you Lord for your faithfulness!!!!!

  10. Stew Says:

    Becky, let me add two more articles to your highlighted posts:

    http://www.gatherlittlebylittle.com/2009/06/giving-under-grace/

    and

    http://www.gatherlittlebylittle.com/2009/06/one-hundred-percent-living/

  11. Sissy Says:

    Thank you for a thought provoking post. I personally like to choose local organizations that I can help with. Sometimes I am able to donate money and sometimes I am able to donate needed items. There is no set rule, but I truly believe that we are called to give out of our abundance. It is hard to see sometimes just where that “abundance” lies, but it’s there…if you are a gifted couponer…your “abundance” may be all the free/or nearly free items you obtain; if your “abundance” is of time, then your gift of time can be priceless to an organization…you can make a difference…just today I saw a posting for people needed for one morning for newsletter folders for a local organization…almost anyone can do this…if you are blessed financially…well, you know where your abundance is…the point being, we all have an abundance of something that we can share with those less fortunate and no matter how bad our situation looks, we don’t have to look far to see someone who has it worse…and out of that…we should also have an abundance of gratitude.

  12. Spencer Says:

    My wife and I don’t send money to charity right now since we’re still early in our Total Money Makeover, but when we do, we’ll probably keep our money local. My wife has volunteered at our local Hospice and we’d love to be able to contribute there. We’d also like to take a closer look at Kiva.org. It might not be considered a charity per-se, but it does make a difference in someone’s life and is a win-win for everyone.

  13. Mike Says:

    Becky,

    There are several ways to give. The point of this article was to look at different ways of giving to charity organizations. Since Tithing was already discussed many times, I thought it would be interesting to look at other options.

    When the Bible was written, there were no organizations searching to cure cancers or to take care of orphans. I am sure those organizations would be part of giving to others, don’t you think?

    What I want to say is; as long as you give, I think you are making a good move.

  14. Susie G Says:

    Technically, as far as the Bible goes, tithing is a Jewish concept, not Christian. Just sayin’.

  15. The Prudent Homemaker Says:

    Often it’s when we are feeling like we have nothing to give (money-wise) that we need to give most of all. By serving others, we concentrate less on what we don’t have, and worry more about others’ needs (which also helps us to appreciate all that we DO have even more).

    I wrote a list of ideas for serving without spending money here:

    http://theprudenthomemaker.com/helpingothers.aspx

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