In this post, I wanted to paste a copy of my firm’s newsletter that went out this past week because I think it was particularly relevant to this season. [If you aren't signed up to our firm's newsletter, it's weekly and covers estate planning, personal finance, and tax tips. Contact us and I'll get you on the list.] Anyway, here we go:
All of this “fiscal cliff” talk is just about ready to make me a little crazy. Every year, there’s some new crisis which Congress has to avert.
That means more uncertainty, and in my opinion, tax rates will go up. This means that many people are looking at accelerating their income into this year as much as they can (though this is a pretty good analysis of why that maybe shouldn’t be the case for everyone: http://www.forbes.com/sites/peterjreilly/2012/12/02/who-should-be-accelerating-income-into-2012/ ).
The nonprofit industry is suffering as a result of the “cliff”. From churches to the United Way, many are reporting decreased giving, with many donors forgoing their “end of year” giving in order to carry as many deductions into 2013 as possible. While that may make sense from a tax perspective, I have another thought.
Five Reasons To Give, No Matter The Tax Rates
When we set up mechanisms for clients to deliver their philanthropy, there’s much discussion about the benefits of the gift.
But what about for the giver?
Here are some strong words about why you should be giving, no matter how effectively your money is spent.
1. Your heart changes. Studies show (http://www.livescience.com/health/080320-happiness-money.html) that when individuals spend money on gifts for friends or charitable organizations, their happiness increases — while those who spend on themselves get no such boost. Even Scrooge can agree that everyone wins.
2. You can double your money without doing any work. Instead of simply sending off your money, why not find out if anyone is offering to match? Sites like www.DonationDoubler.org have lists of companies that will match your charitable contribution. Find one you like and suddenly your contribution goes twice as far!
3. You’re just going to blow it on something dumb anyway. As pious as you are, there’s still extra money in your budget somewhere. Create a budget for charity donations, then take some of your extra money (each month or each year) and donate it to charity. Use your spending money to make a difference instead of spending it on Brookstone junk you’ll use once.
4. Face it: If you don’t help now, you never will. Don’t pretend that instead of giving money you’re going to donate time. When was the last time you volunteered at a soup kitchen? Don’t let your mind fall for this trick. Send the money now or you’ll end up giving nothing.
5. Be a leader, not a follower. This is the big one in my opinion. There’s just something that happens in your psyche when you cut a big (or relatively big) check to someone in need or to a charity organization. You feel more powerful–more dynamic. You signal to your own unconscious: “Money doesn’t rule me. I have more than enough, so much more than enough that I’m giving it away.” Of course, something special often happens: more money seems to find itself in your hands.
I’m not advocating a mystical pay-it-forward scheme; I’m simply making the observation over years of being a student of how money “works”. It just seems to find itself in the hands of those who give it away.
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