Charitable donations surge toward the end of the year, for a couple of reasons:
People want to get the tax write-off, and the holidays make us feel all warm and giving.
The first reason isn’t relevant to those who don’t itemize. But plenty of us give to causes even if we won’t realize a tax gain. According to psychologist Dacher Keltner of the University of California-Berkeley, our charitable impulses are actually good for us.
“There are a lot of new data that show if you’re generous, and charitable and altruistic, you’ll live longer; you’ll feel more fulfilled; you’ll feel more expressive of who you are as a person; you probably will feel more control and freedom in your life,” Keltner said in an interview on the PBS Newshour.
You don’t have to be as rich as Bill Gates to make a difference. The Chronicle of Philanthropy analyzed IRS data and determined those who earned $200,000 or more have lately donated less to charitable causes, whereas those who earn less are giving more.
Keltner notes that generosity spurs production of a neurotransmitter called dopamine, resulting in “a sense of pleasure and enthusiasm about life.” These kind acts also stimulate the part of the peripheral nervous system that soothes the stress response — in other words, being nice to others counteracts stress.
What’s in it for you?
When I was in my late 40s I was paying off debt from a protracted divorce, back in college, working a handful of part-time jobs and helping support a disabled adult child. Yet “giving” was a line item in my monthly budget: I donated a small amount of cash to a specific cause and found other ways to give as well (more on that in a minute).
Some people questioned that decision, saying that cash could have bolstered my own bottom line. Strictly speaking, that was true. But I continued to give.
Why? Because there was need. But also because it got me out of my own head. Despite how much I worried about money, the ability to give clarified my true position: I had enough to eat, a place to live and, thanks to a scholarship, a chance to further my education.
That monthly donation reminded me how blessed I truly was. In addition to those bursts of dopamine, it gave me a much-needed reality check: Despite my fears, I had enough. I had so much enough, in fact, that I could make a small gesture to help others.
âWe all have something to give’
Maybe your budget is super-tight and you really can’t see a way to give. Remember that donating isn’t always about cold, hard cash. Goods and services matter, too.
While back in college I used coupons and rebates to get free toiletries that I donated to a homeless shelter. I also took advantage of late-summer loss leaders to obtain school supplies (often spending just a dime or even a penny per item) that I dropped off at a social services agency.
“We all have some something to give, whether it’s time or money,” says certified financial planner Kimberly Foss, founder of Empyrion Wealth Management.
She suggests a yearly “clean-out day,” to identify clothing and other items that could be given away. (Just make sure they’re in excellent condition — no fair expecting others to be grateful for worn-out stuff.) Don’t limit it just to charity thrift shops, however; for example, a child-care center might want toys or children’s books. My significant other just gave his old clarinet to a school music program. A close friend gave fabrics to a community theater company.
Make sure you keep records of what you gave along with the receipts given by the charities. If you don’t want to do it on paper, use an app like It’s Deductible or Donation Assistant by TaxACT; these apps provide fair market values for a lot of commonly donated items.
Foss notes that some of her newly retired clients have a hard time adjusting to the non-work world, only to “come alive when they begin to volunteer in their community.” Of course, you don’t have to be retired to give of your time; maybe you could be a Big Brother/Big Sister, unpack goods at the food bank or volunteer at your child’s school.
Or make your community-mindedness more personal. Got elderly neighbors who can’t shovel their own sidewalks? Lend them a hand.
Grandmother no longer able to drive? Offer to take her to the supermarket once a week. Single-parent sister stressed and exhausted? Take the kids off her hands for a few hours so she can get things done or just take a long, hot bath.
Charity begins at home
One thing to keep in mind about giving, however, is that you shouldn’t give more than you can afford. This goes for time as well as money. Overschedule your community spirit and you’re not doing anyone — including yourself — much good. Pick a few things that are important to you and focus on giving your best to each one.
When it comes to cash, it’s fine to make “giving” a line item in your own budget. Just make the amount realistic, so you don’t get carried away by holiday sentiment or a picture of a sad-eyed child.
“Those of us who feel that we have something extra? Out of gratitude we want to help those who don’t. But we can get carried away,” says Dr. Kate Levinson, author of “Emotional Currency: A Woman’s Guide to Building a Healthy Relationship With Money.”
Rather than just coming up “with an imaginary number,” we need to determine how much giving our budgets can withstand. Levinson suggests contributing throughout the year vs. trying to do it all at the end of the year. Not only are our wallets being hit hard during November and December, we might be more likely to get carried away by holiday good cheer and pledge $100 when we can really afford $50 at the most.
Obviously, giving should be part of a balanced personal budget. In other words, after you’ve paid your bills, contributed to a retirement plan and built a savings account. That last item does more than just ensure you’re ready for emergencies: Eighty-four percent of respondents to a 2013 Ally Bank survey said that having money in the bank helped create “an overall sense of well-being.”
One last tip: Levinson suggests making charitable donations in other people’s names vs. giving a physical present during the holidays. After all, some people have all the stuff they’ll ever need and would love the idea of someone in Romania receiving a flock of chickens through Heifer International.
Bonus: Less clutter in their lives, and you don’t have to dust a donation.
How do you give back to your community?