Does Charitable Giving Make Financial Sense?

This isn’t the post about how charitable giving can help your tax bill (although it can). It’s a post about how a practice of charitable giving can fit in with the idea of financial discipline.

On the surface, they can seem like an oxymoron. Most of the time we squeeze every last cent into the piggy bank, because we know without discipline we’d likely be neurotic spendaholics who are worth more dead than alive. So what about charitable giving? How can we say to save as much as possible, while at the same time handing over money with no strings attached?

Is there any financial logic we can use to justify charitable giving as a responsible characteristic of financial discipline?

Give So That You Receive

Economists, and particularly activists, often try to argue that there is personal gain in giving. For example, “give to cancer research and help find a cure, because one day, you might get cancer yourself.”

I’ve heard that there can be truth to this argument. One of my former business professors worked on research that found that companies who practiced social responsibility often performed better in times of economic hardship. I would not wake up surprised tomorrow if it could be proven that when charity goes around it also comes around. However, I do find this motivation unsatisfying.

I have no problem with people who give in the hope of receiving some unknown, future benefit. However, the idea of giving to receive just doesn’t sit well with me.

Give To Achieve a Goal

If you are like me, you are looking for another argument for how giving can also be financially sound. You might find my next argument more to your liking.

Let’s face it, money isn’t an end, it’s a means. A means to what? That’s a much bigger question for a different post. Money is a means to achieve the goals we want: the dream vacation, the early retirement or the kid’s college education. If it’s all about fulfilling goals and avoiding spending that gets in the way of those goals, then making your charitable giving a personal goal makes perfect sense.

Why couldn’t it be this easy? Giving can be as enjoyable as any other activity, so long as giving fits into something you feel passionate about.

If you want to give to receive or give as an end, it doesn’t matter. The next time you want to open your wallet to a cause, go ahead. Charitable giving does make perfect financial sense and can even help promote personal financial discipline.

11 Responses to Does Charitable Giving Make Financial Sense?

  1. […] Does Charitable Giving Make Financial Sense? is a post from: 20′s Finances If you are reading this outside of a RSS reader, this content has been stolen. […]

  2. I would tend to agree and think that you should give if you have the ability to. I also like to give to charities that are financially sound as well (as long as I support their mission) so that too much is not going to admin costs.

  3. krantcents says:

    I used to write a check and give clothes to charity, but last year I started volunteering. I find that much more satisfying.

  4. DLH says:

    No doubt charitable giving makes sense, and it also makes sense financially.

    “It is well to remember that the entire universe, with one trifling exception, is composed of others.” ~John Andrew Holmes

    Selfishness is at the root of many financial problems. The happiness we chase can’t really be achieved by focusing on ourselves. Real happiness comes from knowing you’re doing the right thing.

    If you make giving a priority, putting it ahead of personal ambitions, it’s very tough to get in trouble financially. If you first make sure you meet your personal financial commitment to your community, social justice, the needy, etc. before spending you will never go in debt.

    Sure there are those in fiscal crisis that can’t give, but that’s where those charitable gifts we make just may be able to help.

  5. Something that I have always thought about when considering charity:

    What is better – giving as much as you can spare throughout your life and potentially never becoming very wealthy yourself; or building your personal wealth first and then having an ability to give so much more, but later in life?

  6. Allen says:

    Yes I do think that it makes financial sense. I grew up as a Boy Scout. Now that I am employed, I never forget to do my duty to serve and give to others without expecting in return. I have actually made this a goal every month and it made sense. Saving portion of my money for services fund has helped me learn how to budget.

  7. Giving to charity is a choice. N one’s pushing you to do it. If you have the money to share, do it. Besides, there are other ways to give to charity other than financial support. Just like krantcents. And it must also come from the heart.

  8. […] Does Charitable Giving Make Financial Sense? […]

  9. I think it will come back 10 fold, so giving is important. It is not something to go into debt over. Give if you can.

  10. I agree, I think charitable giving make a lot of sense. It makes sense in more ways than one! Interesting article, thank you for posting!

  11. This is a great post which got me thinking. I think charitable giving is very important, you need to be careful not to give so much that you get into debt, you need to give a small amount to help others. Every time I give to charity I feel an overwhelming sense of goodness, this then translates into positive energy which I use to make more money, the amount of energy is incredible, you feel like you are ready for anything and god is on your side. Really loving the posts, keep them coming.