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Why Charitable Giving Should Be A Part Of Your Budget

15 Nov 2022

Charitable giving makes you happier and helps make the world a better place. This blog post will help you find the right charity for you!

When we think of charitable giving, big names like Bill Gates and Warren Buffet inevitably come to mind. Such perceptions also align with the historical record when supporting a certain cause was the domain of the rich.

These days as wealth is distributed relatively more equally and the living standards have grown, more and more people share at least a part of their wealth with those less fortunate. 

Others are more cynical, rightly pointing out that the wealthiest people between them could end all sorts of problems if only they opened up their wallets a bit more. That being said, all of the world’s ills will not be solved by Elon and Jeff. So yet again it’s up to the little guy to rise to the occasion and help make the world a better place. 

This blog post will be exactly about that. First, I’ll outline why donating is a worthwhile endeavor not just in terms of helping others, but helping you. Afterwards, I’ll try to help guide you through the fog of picking a charity to support.

Why Donate?

The question of whether to donate is actually a reasonable one given the current economic climate. After all, with sky high inflation and looming recession, it’s not like most of us are swimming in spare cash these days. In fact, it may be harder than ever to budget even small amounts of money for that purpose.

That being said, it actually might be more important than ever to set aside money for charitable giving both for others’ and your own sake. Here are the key reasons why that is the case:

Donating makes you happier

As it turns out, money can buy happiness. The only catch – you have to spend it on someone else. A team of researchers at the University of British Columbia and Harvard Business School found that giving $5 to someone or something (like a cause or a charity) gives a bigger happiness boost than spending $20 on yourself. Other studies confirm that donating activates reward centers in the brain.

Lack of giving in contrast can have negative effects on your body and mind. For example, one study showed that those participants who chose to hold on to money instead of giving it away saw their stress hormone rise significantly, thus contributing to negative emotions and shame.

Finally, it’s been proven that having financial security provides happiness. However, at one point the returns in happiness from the money saved drops significantly. This was corroborated by Matthew Killingsworth whose study clearly showed that past $75 000 a year, the experienced happiness grows very slowly. If overall global happiness was a KPI, it would make most sense for your happiness and the happiness of others to give away a significant chunk of any surplus past $75 000 a year.

Each dollar makes a difference

As I said in the intro, people tend to think that only millionaires can make a difference. The fact of the matter is that each and everyone of us can help make the world a better place. And that can be done even with small amounts.

One doesn’t have to opt for a high-flying, international charity to support. You can easily find a cause to donate to on local and national levels. In many cases these smaller causes also tackle less systemic and therefore less expensive problems. For instance, making a $5 weekly donation to your local dog shelter may have a more tangible impact than donating the same amount to a charity that improves gender equality in a developing nation.

You can, of course, also find these “good bang for the buck” charities internationally. For example, donating only $2 to Against Malaria is enough to buy a mosquito net to limit the spread of malaria. So $2 can save a life or prevent serious illness with lifelong consequences.

It helps create a better world

While this phrase may sound clichéd, there are at least three reasons why it is true. First, by donating you are helping the most vulnerable and needy to improve their lot and potentially have happier, more successful lives. While the odds were stacked against them initially, your help can help raise them to the extent that they can effectively contribute to society and at one point maybe even donate themselves.

Second, by donating you foster a sense of belonging. Of course, the most obvious form of this is a sense of belonging to your local community, but this can also contribute to your sense of belonging as a European, as a global citizen, or as part of an organization or network like Nerdfighteria.

Finally, by donating you are setting an example to others. Of course, screaming out in the streets that you are a very charitable person would not be in good taste. However, showing your family and friends that you donate, to what organization you donate to, and why you do that, sets a nice example that others can emulate thus creating a more generous society.

Charitable Giving For You

Let’s say I managed to convince you about the merits of charitable giving. The question then is how to pick the best and safest charity towards which to direct your money. There are millions of non-profit or charitable organizations that rely on donor support and most of them really do God’s work.

Undoubtedly as with all things human, there are some bad apples in the charity sphere as well. That being said, most charities really do genuinely good and honest work. To find the right charity for you, think about the following three things.

Determine which issue matters most to you

There are countless different types of charities. For example, they can focus on humans, animals, social issues, the environment etc. Within each of these broader categories, there are dozens of subcategories and hundreds below that. 

I’d suggest picking a major theme that you are interested in and then working from that. Let’s say you want to help children. Then focus on aspects which you want to support within that broader range – education, health, well-being, nutrition etc. 

Then pick a region in which you would like to operate in. This is actually where the first dilemma comes. On one hand most people will feel more connected to a local organization. On the other hand, as effective altruism stipulates, it would be more impactful to lavish your funds on less developed regions where each of your bucks will go way further than they would in, for example, Western Europe or North America.

Find an organization that aligns with your values and vision

There might be a temptation to skip this step as there is an assumption that all charities are virtuous. Even if that was true, all organizations have their own sets of values and alignments.

Once you’ve found an organization that suits you theme wise, go through the “About” section on their web pages to find out whether you can get behind their mission and vision statements, as well as their values. 

For example, if sustainability and gender equality matter to you, check if they adhere to these principles in their work and hiring practices. Likewise, if you are apolitical or non-religious, you may not feel comfortable supporting an organization with deep ties to political parties or organized religion.

Trust me – it may not seem like much, but you’ll be happier having done this research. That way you can potentially avoid some unhelpful association with something that doesn’t represent you at all.

This conversation should include the survey results of that particular unit or team, as well as the individual goal assessment and performance measures of that particular employee. These are the main things that have to be considered: 

Look for a well-run, reliable charity

By this point you should have narrowed down your selection to a few potential picks. There really are two things that should guide your decision when it comes to finding a reliable charity.

First, find a transparent charity! A sign of a good and reliable charity is an abundance of information about their allocation of funds, administrative costs, and project implementation. If you struggle to find this information, not to mention information about the organization’s mission, vision, and values, steer clear! In addition, a strong public and social media presence, regular newsletters, and positive media coverage are good indicators of a solid charity. 

Second, find a charity that reaches results! Huffing and puffing is one thing. It’s a whole different story to get things done. Look at their past accomplishments and results. How do they stack up against other charities in their money and resource management? 

Speaking of management, look up who is heading the charity and what their credentials are. If the organization is in the hands of someone experienced, reputable, and respected, chances are things are run well. Conversely, if any of this information is hard to find, that should be a red flag!

That being said, do not feel obligated to put all your eggs in one basket. If all your charities are well run, there is no rule that you can’t split your monthly payment between them. In fact, you’ll potentially do more good and avoid the risk of tying yourself solely to an organization that ends up not being what it was cracked up to be.

Final Thoughts

Sharing really is caring. In a material sense there is only so much we need to be happy and fulfilled. In turn, the same resources that do very little for us, can go a long way in making the lives of anywhere from a few individuals’ to a few thousand lives better.

Let’s celebrate this Thanksgiving month not by simply being grateful about what we already have, but actually taking steps to make the world a better place!

Author: Lote Steina

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