Philanthropy

From the Greek for “love of humankind,” philanthropy means giving of ourselves to help others. While often used narrowly to mean rich people writing big checks to avoid paying taxes on their income, philanthropist MacKenzie Scott argues for a more expansive definition of philanthropy, encompassing the ways all of us give money, time, and energy to help those in our lives. She suggests that the sum total of this everyday philanthropy dwarfs the $471 billion that Americans donated to charities in 2020.

See to the needs of others and all your own needs will be fulfilled.
—The Tao Te Ching

Helping Others Makes Us Happier

From Dacher Keltner:

Helping others triggered activity in the caudate nucleus and anterior cingulate, portions of the brain that turn on when people receive rewards or experience pleasure. This is a rather remarkable finding: helping others brings the same pleasure we get from the gratification of personal desire.

But philanthropy is no substitute for a just society

Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary. (Dr. Martin Luther King, Jr.)

Set Money Aside

The best decision I ever made in this regard was to set aside a certain amount of my monthly income to give away (allocated in my favorite budgeting software), which makes giving to charity or helping those in need extremely easy because I’ve already decided the money isn’t mine to keep. Giving no longer competes with saving because I’ve decided my priorities for each up-front.

You might also consider opening a Donor-Advised Fund, which is like a bank account that can only be used to donate to registered nonprofits. This lets you decouple allocating money to give to charity from actually having an organization in mind to donate it to. There are tax benefits, because money becomes tax-deductible when you put it into the account, not later when you actually decide who to give it to. And interest on the account (or any assets like stock that you put in) can grow tax-free until you give it away. And if like me you choose to set aside a certain amount of your income to give away, you can put it right in the DAF while waiting for the right giving opportunity to come along. That said, there are plenty of people and organizations in need who aren’t registered nonprofits, so if that’s a part of your giving strategy you wouldn’t want to put everything into a DAF. I opened one in 2021 through Fidelity Charitable which came recommended, although newcomer Daffy is taking an app/startup approach and offers much lower fees (if you’re willing to trust them). You can have some fun with the name of your fund: mine is called Fundy McFundface. Having started my career in the sometimes dull and discouraging nonprofit sector, I hope it occasionally gives a chuckle to the people working in development processing my donations.

Resources

• GreatNonprofits.org is a directory of nonprofits for finding organizations to give to