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Financial freedom and giving

Can you help others whilst helping yourself when it comes to finances?

By Business Rules for LifePublished 2 years ago 3 min read
Financial freedom and giving
Photo by Sam Dan Truong on Unsplash

I'm always inspired by the many people on a journey to financial freedom, who still prioritize giving to others. Even if your goals are based on amassing wealth, I think donating helps get out of that scarcity mind-set that being financially secure is all about. I try to remember that there are plenty of people living in situations where there is no realistic opportunity to get themselves out of poverty.

Here are a few ideas that might help you, help others even whilst you are building your own wealth.

Budget for a donation

I build an annual donation into my budget each year, which I make on top of ad-hoc donations to friends fundraisers. The actual dollar amount is tiny when I think of it in terms of my total annual spend (I calculated it's about 0.2% of my total annual income), so it doesn't feel like I'm making a huge sacrifice against my personal finance goals.

I also budget my donation to happen in November, so it doesn't coincide with December which is typically my most expensive time of year.

Not for profits survive much better when they can rely on regular donations, so you might also consider setting up an automatic monthly payment. I don't do this because I want simplify my finances as much as possible, so prefer to make a lump payment each year.

In Australia, donations to organizations with an ABN are also tax deductible, so it might make even more financial sense to donate instead of saving that extra crumb.

Ensure your giving has impact

Even if I'm giving away my money, I still don't want to see it wasted. Many organisations have big management overheads, unclear goals and strategies or are not addressing issues that I personally value.

I spend a bit of time researching charities that focus on the things I think are important, and that work in a way which I think will deliver benefit. In the past I've donated to This Is My Earth, which purchases land for conservation and sets up long term protection programs, and Watsi, who directly fund healthcare for patients around the world. This year I'm donating to GiveDirectly, who give cash directly to people in extreme poverty, to improve their lives however they see fit.

I give to organizations that have transparent spending, and use their public donations directly for the cause rather than on overheads and running costs. There are also some good resources that evaluate the impact per dollar that charities typically achieve, so you can choose one where you know you will be making a difference.

If you're in Australia, The Life You Can Save is a good place to start, and you can donate through their website to international charities but still have your donation eligible for tax deduction.

Give something other than cash

Giving locally is another way of getting assurance that your money will be put to good use. If you're not in a position to donate financially, consider donating your time or expertise instead.

Find a volunteer group and be a helping hand, or see if a local charity needs your accounting skills, Powerpoint expertise, or a webpage designed for them. Even if you are short on time, many of these tasks can be done remotely and flexibly. Just be sure that you follow through with any commitments, as these small organizations will be relying on you!

Request donations instead of gifts

Finally, if you are short on both time and money but still want to do your bit, consider asking for a donation in your name instead of a Christmas or your next birthday gift.

This is a great option if you are a difficult person to buy for (yes, that's me!) and you won't feel guilty that someone spent their money on an unwanted item. It also takes the pressure off the giver, as they won't need to spend time finding that perfect present for yet another year.

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Business Rules for Life

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