Many studies have shown that charitable giving provides greater happiness than buying more stuff. Eventually, you get used to your fancy new car, and the level of enjoyment it provides goes down. But giving forges feelings of connectedness and community that don’t fade away.
Incorporating charitable giving into your financial plan is a great way to make sure that your generosity is aligned with the things that are most important to you. Some forethought about these key issues will also make sure that your good intentions don’t throw off the rest of your own long-term planning:
- Have a purpose.
The most effective charitable giving is thoughtful and intentional. It may be helpful for you and your spouse to ask yourselves some questions that will narrow your focus, such as:
- Do we want to give to a national or local cause?
- Are there pressing issues in our community that we feel we can help impact?
- Do we have any personal connections to causes, such as medical research or support for the arts?
- Do we want to support friends or family by contributing to causes that impact their lives or fulfill their passions?
- Do we want to support a religious organisation, such as our church?
- Are our charitable impulses motivated by on-going problems, such as education or homelessness, or would we rather position ourselves to react to events such as natural disasters?
- Do your homework.
Once you’ve settled on a cause, do some research on potential recipients. Visit the local charity you’d like to support and meet with its leadership team. Is the organisation running itself responsibly? Are there good, competent people in charge? Will these people get the job done? Don’t sink your money into a well-intentioned black hole.
If you’re looking to give to a national organisation, keep in mind that even some of the biggest names have come under fire lately from watchdog groups for misusing donations. Make sure you’re giving to an organisation that’s doing what it says it’s going to do with your money.
Also, remember that big organisations – even charities – must manage things like overheads, salaries, and insurance. Are you happy supporting the organisation itself? If you want to see your money in action more visibly, you might be happier giving locally.
- Beware the internet.
Whenever something bad happens in the world, our inboxes and social media are flooded with donation links. Read before you click. Be especially wary of crowd-funded campaigns on sites like GoFundMe. The cause may sound worthy, but these sites do not provide meaningful oversight on every campaign. Your money could be going to a cause, or it could be going straight into a scam artist’s pocket. You’ll never know