I hope you all have had a good Thanksgiving, while, of course, staying safe and not-mixing germs (aka, not spreading COVID).
These days, the Thanksgiving season has been spreading, just like America’s waistline after the big meal. We have Turkey Day, then Black Friday, Cyber Monday…. and since 2012, Giving Tuesday.
This has been a difficult year for many (most? all?), but I was raised in a tradition of giving, where all except, perhaps, the very destitute are expected to give a hand to others. However, I understand that not everyone has that background.
I thought that today, the day before Giving Tuesday, might be a good time to review some thoughts on giving: why, when, and how to fund giving. As a bonus, I also decided to list the eight levels of charity, also called the Golden Ladder, which is a nice framework for thinking about how to give.
I would posit that giving to others, even if only a little, has many benefits:
- It makes you feel good.
- It makes you appreciate what you have.
- It may also buy you social cachet (think, supporting the boss’s charity, or putting your name on a plaque).
- It can help lower your taxes. This year, because of the CARES act, you can deduct $300 “above the line” if you donate that much to charity. If you are going to give a lot, or if you already have plenty of other deductions (usually state and local taxes, mortgage interest), you can itemize your charitable deductions on schedule A to help reduce your taxable income.
- You are helping bring good into the world.
I wrote last year On Giving, Part 1, linking to posts by others about the many reasons you should think about giving to others–in this season, or at any time in the year.
Though I plan to review ways to give money, for some of you, especially this year, cash may be in short supply. There is no reason to let a lack of funds keep you from giving to others if you have the desire; gifts of time, or of attention, (think babysitting, sitting with the ill, clearing your elderly neighbor’s sidewalk) are valuable and cost you little. I enjoyed the recent List of Random Acts of Kindness, from Modern FImily, which was a great list of ideas to make life better for one another.
Without further ado, here are some opportunities to give money this year:
Money in the jar: this can be the Salvation Army kettle, the fundraiser jar at your local store, a panhandler on the street.
The tip: at a restaurant (hopefully only take-out these days), to the delivery person (meals or groceries), maybe for the (masked) barber or hairdresser. All of these people are putting themselves at risk of catching coronavirus and could probably use the money right now.
The one-time ask: when asked to support a fundraiser by friends/family/co-workers. Or when asked by the dean (or head of the practice) to honor a retiring colleague or to support a scholarship.
The recurrent donation: supporting the cause(s) you really care about.
I would like to point out that there are a number of ways to fund these donations:
Cash. Especially for fundraising jars and tips.
Check or credit card. Works for just about everything else. Plus you get a receipt if you want to itemize your giving on your tax return.
Charity Gift Card. I was very interested to hear about this option from Harry Sit at The Finance Buff. This summer he wrote about TisBest Philanthropy, which offers gift cards for giving to charity. You can either give these to someone as a gift, so that they can make a donation to the charity of their choice, or you can use them yourself. My favorite part: this keeps your information anonymous, so that your one-time donation doesn’t turn into a flood of appeals from that charity and anyone else it sells information to.
Other Peoples’ Money: yes, you can get other people to help you support your choice of charity. The best bet is through corporate matching, if you work for a company that does that. You give to charity, and let them know who you work for; they hit up your employer for a matching amount. Another great bet is to give when there is a giving challenge: Habitat for Humanity often asks for money, stating funds raised until such-and-such a date will be matched by their corporate sponsor. And then there are the smaller efforts. I am planning to visit Physician on Fire tomorrow; in the past few years, for Giving Tuesday he has been making donations to charities suggested by readers.
Payroll deduction. I started doing this a few years ago; my hospital partners with the United Way, to allow monthly donations to charity. You give monthly through payroll deductions, which I like. The automation means I don’t have to remember to donate every month. I am not so sure about the 12% taken off the top to support the United Way, but for now, I will keep it. (It’s not as though I don’t see the United Way offering support in my community.). I also get (probably very small) bonus points at work for supporting this program.
Appreciated stock. Very helpful for larger donations (your recipient needs to be able to accept the gift). If you give this way, you don’t have to pay taxes on the increase in value of your stock, and neither does a charity. For example, if you bought TSLA at $180 in June, and donate 10 shares at $555 this week, your charity gets the whole $5550. If you sold your stock, and then gave what was left over, you would have to pay taxes on the gain ($375 x 10 shares =$3750). Unless you felt like kicking in more money to pay the taxes, your charity would be getting a bit less.
Appreciated stock via Donor-Advised Fund (DAF). Again, this is a great way to use stocks that have increased in value to fund charitable giving. In this case, you can donate your stocks to a DAF; your money can be invested and grow over time, if you like, but you can also start giving right away. So maybe you donate 100 shares of TSLA, but instead of giving $55,500 away all in one year, you can give away the money over 5 to 10 years. In prior years, I was not sure about the fees: at Fidelity, which allows for smaller grants, the annual fees are 0.6% or $100 a year, whichever is more. However, after reviewing the 12% that the United Way takes off the top for payroll deduction, I may be looking more seriously at this in the future.
For anyone still reading this far, I would like to end with the eight levels of charity, as noted by Maimonides, a physician and a great philosopher.
In ascending order of righteousness:
- Giving reluctantly, and with regret.
- Giving graciously, but less than you should.
- Giving what you should, but only after being asked.
- Giving before being asked.
- Giving to an unknown recipient.
- Giving anonymously.
- Giving anonymously to an unknown recipient.
- Helping another become self-sufficient through a gift or loan, or by finding employment for the recipient.
I find it worthwhile to review this once or twice a year, and to consider where on the list my gifts fall. I’m not always at the most altruistic, but to be honest, it is better to be anywhere on the list, than not on it at all.
If I have inspired anyone to support others this season, or to give more than planned (but not more than they can afford!), then I will consider this post a success.
Are you donating to charity this year? If so, what is your favorite way to give?
Compelling article. As a high earner that is financially comfortable, I consider it a social responsibility to share our resources. As a Christian, I am called to give. I donate by check or credit card and the occasional anonymous cash gift for a struggling employee. I have given above baseline this year. The generosity of others contributed to my success and it feels good to give back.
Thank you for stopping by and commenting. It is so good to hear from others who give–both why and how. I agree that having been supported by others, I do feel an obligation to support others in return.
If want to hear some great stories about giving, go to generousgiving and watch some of their videos. I absolutely love their message and I have attended their conferences in the past. Life changing.
Thank you for stopping by. Supporting being good to one another seems like a good thing, this year more than most.
Love this article! My family really values our charitable giving, most of what we support are organizations that our friends lead or are involved with. We feel great supporting our friends and the amazing work they are doing.
It was mentioned briefly how in this case the United Way takes 12% off the top in contributions to them to support itself. Often, people become frustrated when they see a nonprofit organization using a portion of its funds for admin expenses and they want to see their money going to help the cause they are supporting (and rightfully so)! It is important for folks to keep in mind that a well run organization is taking those admin dollars and leveraging them to raise even more money or do more effective work. Dan Pallotta has a great TED talk on this.
Again, thanks for the post! I love the encouragement for people to be generous!
Thank you for stopping by and leaving your kind words.
I struggle with the administrative fee, one of my usual charities did send me a letter asking if I wanted to send more since my donation was diminished; but the UW does so many good things in my community, I don’t mind too much. And in this crazy year, knowing that the charities I want to support are getting money every month–and not relying on me to find the time to send a check–makes me feel better.