How to Give to Charity in a Way that Makes an Impact
It may be hard to see sometimes, with the often apocalyptic 24-hour news cycles, but there is a lot of good out there in the world. One of the good things is how generous Americans have been with their charitable giving. Part of this widespread generosity is tied, no doubt, on the internet connecting people all over the world. Americans gave $410.02 billion dollars to charity in 2017, breaking a record and 70% of that was given by individuals.[i] As wealth grew, so too did charitable giving and generosity. Within that huge number, over $400 billion, some interesting patterns and data appear. Within this article, we will discuss why people practice charitable giving, who is giving, and how, if inclined, you could give more as well.
There are so many in need and for so many reasons. Between medical research, animal charities, environmental disaster, the refugee crisis, health crisis, homelessness, drug addiction, food instability, arts organizations, you name it, and there is a cause that could use the help. There is also solid evidence that your donations actually do make a difference to these causes. They do need and appreciate every penny they receive. But did you know that giving is actually good for you too? In fact, giving triggers a pleasure point in our brain, the same area of reward processing that is activated by pleasurable activities like sex and food.[ii] Donating our time and money to a cause makes us feel good, helps contribute to our overall happiness, and can actually help our health and mortality rates.[iii] On top of helping others and feeling good, charitable donations can be tax deductible, and for some, that is motivation enough. A good rule is before donating to anything you plan to claim, do your research and confirm that they are a recognized non-profit organization by the IRS and always get a receipt.
People from all walks of life give, but single women and married couples give and volunteer the most. In fact, with 93% of high net women giving to charity and 56% of them volunteers.[iv] Adult daughters of wealthy families give more to causes than wealthy sons. Overall, women tend to give more than men across the board, regardless of tax bracket. As of 2017, women in the US now control half the total wealth in the country and 40% of US households have a woman as the primary earner, and those numbers are projected to increase. Women-owned companies now account for 30% of all privately-owned companies.[v] So, as women have more control over more money, so to do they give more. One theory on why women give more is that they choose causes that are meaningful to them, and so the giving has more emotional weight. A larger number of women's donations also go toward uplifting other women and families, by donating education and nutrition and help lift people out of poverty.
The Shift in Giving Culture
The whole culture of charitable giving has shifted over the last few decades. In the past, philanthropy was more the purview of the retired set. Now, being civic minded and socially active is an important part of the Millennial generation. With information and fundraising just a click away, anyone can help from the comfort of their own home. On top of that, while financial literacy and independence increase in women, so too does their capacity for giving. As stated above, there is a cause for every passion, and in some ways, it can be head-spinning how many organizations and non-profits need help. So, making the right choice about who to give to has become more important. We don't want to donate and learn only 1% of that donation goes to the real cause and the rest goes to paying those who operate the organization. Causes that have clarity of mission, transparency in their money allocation, and a good story are more attractive to the modern philanthropist.
How to Give?
There are so many ways to give that surely you can find one that fits your lifestyle and budget. It's always important to remember that volunteering your time or expertise, donating your items like clothes, furniture, cars, or appreciated securities (stocks, bonds, etc.) are options outside of writing a check. Any and all donation, from a micro-giving campaign of just a few dollars to set up a (DAF) donor-advised fund where you decide who and how much to support throughout the year, will make an impact. You may find yourself passionate to start your own charity and fundraisers (ever seen the Facebook charity donations for birthdays?). Since you can donate up to $100,000 a year and it won't be included in your taxable income, so give, feel good about it, and know that your contribution is helping to make your world, and your community a better place.
About the Author
Carroll W. “Bill” Hayes, MBA, CFP® Mr. Hayes started his financial career at Merrill Lynch in 1989. In 1992, Bill left Merrill Lynch for Fidelity Investments. During his career at Fidelity Investments he held roles in various divisions of Fidelity. Those roles included positions in the Trust, 401(k), Brokerage, and Money Management divisions. Bill held management positions at Fidelity and in 2001 led a Private Access team based in Boston. In the Private Access role his responsibilities included managing a book of business in excess of $3 Billion and a client base that was international in scope.
In 2008 Bill established Charles Carroll Financial Partners. The firm is an Independent FeeOnly Financial Planning and Investment Management firm. Charles Carroll Financial Partners embraces its fiduciary responsibility to its clients.
Bill is a graduate of Marquette University, and holds an MBA from the Sawyer School of Management. Bill holds the designation, CERTIFIED FINANCIAL PLANNER, and currently presides as a Commissioner on the Disciplinary and Ethics Commission of the Certified Financial Planner Board of Standards. Bill resides in Massachusetts with his wife Christine and travels up and down the East Coast meeting with clients of the firm.