A More Intentional, More Enjoyable Approach to Giving

Most people give in a reactive way.

A friend asks for a donation. A letter comes in the mail. It’s the end of the year and you realize you haven’t given much, so you write a few checks.

There are a few problems with this approach. 

First, and maybe this is just me, but it feels like an obligation. There’s a little bit of guilt involved. “I forgot to do this. Am I letting them down if I don’t give? What’s the least I need to do to avoid feeling bad about this?” 

It’s uncomfortable, and not very satisfying. It feels like “I should” not like “I want to.” There’s just not a lot of life energy in doing it this way. 

This matters because few things are as beneficial for your financial well-being as giving well. It’s not something you want to skip by accident, or associate with low-grade guilt. 

The other problem with reactive giving is that it’s not very intentional. Your money will tend to go to whoever asks first (or whoever you feel awkward saying no to) rather than to causes you actually care about. 

Start with a simple commitment

The easiest place to begin is with a regular giving goal. That might be:

• a fixed monthly (or weekly) amount

• a percentage of income

• a percentage of net worth

Your rule for giving might change over the course of your life. Early on, a small dollar amount might make the most sense. As your wealth grows, you might find that you can give more. 

The key is to do something, rather than nothing. 

It's easy to feel like there’s a “right” answer for where to give. In fact, some people in the effective altruism world, take that idea very seriously. Their goal is to find the most efficient use of each dollar and direct everything there.

I think about it differently.

I don’t think it’s any one person’s job to solve the entire world’s problems. Each of us has a small piece of it. Our influence, and our responsibility, mostly centers around that piece.

That means you’re allowed to care about what you care about, whether or not it's "optimal" in someone else's eyes.

The goal isn’t to find the perfect cause. It’s to give in a way that feels aligned with your heart. 

If your giving makes life a little better in the part of the world you can see and touch, that’s worthy. 

You could even start by buying coffee for the person behind you in line. 

That might sound trivial, but it’s not. Even a small act like that has the potential to brighten someone else’s day, and equally important, it changes your perception of what money can do.

You’re welcome to enjoy your own cup of coffee as much as you like. But I would wager you'll get more enjoyment out of the cup you buy for someone else.

The next question is how to make that a regular experience.

Create a simple process

1. Once a year, review your accounts and your income

2. Decide how much you want to give

3. Turn that into a monthly or weekly amount

4. Choose where it’s going

5. Schedule it or automate it so that it happens on its own

6. Send it

The other way to make giving a more meaningful activity is to involve the people around you. For many people, it becomes more meaningful (and fun) when it’s a shared experience with your partner, with children, or even with friends.

This turns giving into something you talk about, think about, and learn from over time. It’s a shared adventure. 

Lastly you'll want to integrate this practice with the rest of your finances.

Most people give from cash. That’s definitely the simplest approach, but there often is a better option. 

If you have a taxable investment account, you can give appreciated shares of stocks, ETFs, or mutual funds instead.

This does four things:

• Avoids capital gains taxes on the donated amount

• Allows the full value of the investment to go to your cause

• Increases the size of your deduction (lower taxes today)

• Lowers the amount of unrealized gains in your portfolio (lower taxes in the future)

Over time, this can increase the amount you’re able to give without changing your lifestyle. 

It also tends to make giving feel easier. You’re not writing a check out of your bank account. You’re using gains that have already been created. At this point, you might start to feel like a little bit of a philanthropist, which is really fun.

But there's a reason I put this section last. The most important thing is to make a habit of your charitable contributions. By shifting just a little attention there, you'll greatly enhance your sense of financial well-being, and your life.

It adds a sense of meaning. It connects you with others. It reinforces the sense that you have enough to share.

And it makes your world a bit more wonderful, both subjectively and objectively.