Donating To Charity
Canadians rank number two behind the United States in terms of philanthropic giving as a percentage of GDP. There are plenty of good reasons for donating to charity, and I am going to show you how you can make the biggest impact with your time and money.
By now you’ve probably heard of the group of billionaires who are pledging to give away half of their wealth to charity. Led by Bill Gates and Warren Buffet, this recent generosity of the super rich is unprecedented and has a chance to redefine philanthropy and make a real difference.
When You’re Young, Donate Time
When you are young there are a tremendous amount of financial pressures in your life. Most people start out paying off consumer debt, saving for a down payment on a house, contributing to their RRSP and TFSA accounts, paying down their mortgage, buying a new car, raising a family, and saving for their child’s education.
Adding significant charitable contributions to these enormous financial responsibilities could be next to impossible for a young person to manage, especially if they are in debt. By ensuring your own financial house is in order before donating to charity, you can set yourself up for more meaningful contributions later in life.
While most young individuals may be lighter in the wallet they can make up for it by donating their time and energy to worthwhile causes. Consider getting involved with your favourite charity by volunteering at an event, helping out on a fundraising committee, or joining their Board of Directors.
Living on a single income we can’t afford any significant monetary contributions to charity. A few years ago I joined a fundraising committee with the MS Society and led a team of co-workers, friends and family that raised close to $10,000 at the MS Walk. This effort certainly made much more of an impact than any donation I could have scraped together that year.
Fewer Charities, Bigger Impact
When you do decide to donate to charity, you won’t struggle to find a worthwhile cause to support. People are more likely to give to a charity in which they have a personal connection to, whether that is a love for animals or children, or a friend or relative suffering from a particular ailment.
Narrowing down your list of favourite charities is important because it will help you plan your gifts in a way that fits into your available budget. How many times are you asked for charitable support each year? There’s door-to-door canvassing, co-worker or employer fund raising events, children’s school activities, and various relief efforts around the globe. You can’t even shop for groceries without being asked for $2 to support the stores’ charity of the month.
All of these donations add up over the course of the year and, if you can’t say no, they can definitely impact your finances. I like to forecast my income and expenses for the year and plan for my charitable giving by setting aside money in the appropriate month where the fundraising will take place. And if you can’t say no, set aside some miscellaneous money each month to cover your spontaneous donations.
Making Your Impact Later In Life
Most people don’t make a significant philanthropic gift until after the age of 60. In fact, most major donations are likely bequeathed to an organization upon their death. This makes a lot of sense, considering that most, if not all, of your financial obligations are looked after, you may be in your highest income earning years, and you may have accumulated a fair bit of savings by this time.
Delaying your charitable contributions until later in life will also give you more time to choose an organization that is truly meaningful to you. And if your gift is significant you might even have the ability to direct your donation to something very specific in that organization, such as medical research, infrastructure, an endowment, or student awards.
Donating To Charity Is Important
Whether you decide to give your time and money now or in the future is your choice. Donating to charity is a personal and private matter, and most people give quietly without any hidden motivation. For now I am content to donate my time and energy while I’m young and still building our financial foundation, but I hope to have the means to contribute significantly in the future.
You can also donate things other than time and money, should that be a route that you wish to follow. One such way is by making a sponsored boat donation. When donating an old boat, all you have to do is contact the charity and let them know your intentions. The charity will then walk you through the entire process and will handle the sale of your boat themselves. The money for which the boat sells is then used by the charity to fund one of its causes. As an added bonus, you will receive a tax deduction once the sale has been completed.
Do you feel that it’s important to give whatever you can afford to charity?
Thanks for the great post. One of my favorite quotes comes from Robin Sharma, “The key to a great life lies in shifting your focus from accumulation to contribution.”
I think the earlier you realize this the more meaningful your life will be. And it’s not the amount you can contribute that matters as much as the quality of contribution.
That’s a great quote Jim, and a good philosophy to live by. Thanks!
Everyone has some kind of obligation to do volunteer work, give to charity especially in the first few years of working life.
Some will disagree but Barak Obama once said to the youth: To make millions later, donate your time to volunteer work the first 10 years of your life. Work in your community, work for non-profit organizations for less pay.
@Doable Finance
I think people can make some real meaningful impact early on in their lives by simply volunteering their time and energy. It’s not all about how much $ you can give.
I volunteer my time for things I value, like museums and the arts.
I refuse to donate money, especially to health/disease research causes anymore because after working for a cancer research agent for three years, I was disgusted by the waste of taxpayer and donor money on mistakes (eg repeating the same experiment because of errors), non-patient related endeavors (basic research instead of applied research, and the misuse of donations (eg. Tix to events given to staff instead of patients).
Donated time is much harder to misuse!
@cf
Interesting take on the subject. As charities and not-for-profits become more transparent with how they spend their money, the amount of waste in some areas is more apparent. You’re right that time is much more difficult to misuse.
I have not met anyone who could give away ten percent of their retirement income that couldn’t give away ten percent prior to retirement. The actual amount is not important. I believe the habit and discipline of giving (of money and time) is something more easily learned early and when followed regularly. It is the reason why payroll deductions work so well. Those who find a way to give out of a little, will surely be rewarded with much. Why should I choose, instead, to be limited to my own reward?
Ian, thanks for your comments. You bring up a good point and I was hoping that someone would mention this. If people get in the habit of donating a percentage of income from the start, much like saving for retirement, then they will be much more inclined to continue to donate after retirement too.
I agree, but would just argue that people should make sure they can afford what they are contributing to charity. For example, I believe that people should pay off their debts and have a regular savings plan set-up for retirement before they start maxing out RESP contributions for their kids.
I completely agree with these points, particularly the point about increasing your money’s impact by focusing it on one charity.
My family started a charitable organization two years ago, and I pledged that 100 percent of my giving will go to this organization, so that my money can make the biggest impact.
Better still, the nonprofit we started has a mission of making the biggest possible difference in the lives of a few — thus making the impact visible, tangible and gratifying. (We send orphaned children in a developing country to boarding school. Right now we can afford to pay the boarding school fees for 3 kids. We won’t take on a 4th until we can truly afford it.)
I try to donate 10% of my income, mostly to charities that directly interact with needy people. Since I’ve started doing this I’ve noticed my remaining 90% has grown in leaps and bounds.
Giving to charities and helping people in need are one of the things that make our spirits soar. It is said that giving and helping others is the fastest way to heaven. If you are a business owner you need to read this article so your business keeps afloat and can continue contributing to the community around it: http://ow.ly/4CSWN
This’s a very interesting article on how one need not pressurise himself/herself just in case, there is not much money left for a give away. The suggestions of participating as a volunteer in a even or even help a fund raising cause, the satisfaction got is more intense than by donation a few dollars. Thanks for such an inspiring blog!
I don’t always give to charity when I have the opportunity : I would be broke! 🙂
But I like to give for things I believe in : sports, people with handicaps, students who wants to travel.
There’s a saying that goes like this :
“Teach us to give and not to count the cost. -Saint Ignatius”