Why Do Many MMMers Skip Charity?

[NICE!]

Most of us tend to agree that we live in an era where we can eat healthy things, have reasonable health care, and make gobs of money (if we live in the developed world). Many people here save an incredible sum of money every month - I am truly impressed with the resourcefulness, lack of waste, environmental responsibility, and even social responsibility of so many people on this forum.

Which leads me to my question, something that has been like a splinter in my mind every time I read a case study, journal, etc...

Why do so many people who can save & make so much money feel that it is OK not to give back? If you can save 50%, you could chop that to 45, 40, 30, etc. I personally roll with ~10% for charity but I often feel like that is woefully insufficient given the exploding volcano of cash I see monthly as well as my growing NW. People often trot out the "I'll do it later when I'm wealthier/FIRE etc," but I don't think those people are being honest with themselves. Just like forum members say about life after FIRE - you don't change just because you don't have to go to work anymore. Your hobbies are still your hobbies, your values are still your values, etc. In fact, I'd argue that many will find a reason to justify not giving, because they're worried about their portfolio value. This problem would be even worse in a financial downturn, when people need charity the most.

I'm trying not to be judgmental on this issue, but I'll admit that it is pretty damn hard and I'm failing. Yesterday, I saw a post by someone who is FIRE in his 30s, doesn't give a dime to charity, and bought a damn Humble Bundle for a penny. If people aren't familiar with the Humble Bundle, it is a great download where developers sell their games for a donation to give to charity. Buying it for a penny is like a stick in their eye, like giving a .01 tip to a waiter. Could you really not afford to bump that up to a dollar? Ten? One hundred?

I know that charity isn't perfect, but neither are your stocks or bonds since you probably own portions of a host of socially irresponsible companies. By all means, do your research and give to the issue that is closest to your heart or your home. Find charities that are managed well. If you think an issue like malaria bednets causes other problems (like overfishing), find another issue without second-order effects.

I've often heard the line "I give my time instead of money." Charities need both. It is really awesome that you give your time, but don't act like that is a 1:1 replacement for cold, hard cash. The blind orphanage appreciates me stopping by, as do the kids, but they needed food more than they needed my presence. Time does not replace money, nor does money replace time.

I realize that I might ignite a flame war, but I'm willing to take that risk. I also realize that this line of questioning may not apply to many of you - thank you for helping support valuable causes. I feel like many people are watching the dollars stack while not caring for the poor, the sick, the oppressed, etc. Your giving rate is more important than your savings rate!

PS My apologies if we've been down this road before. I did a forum search and saw one or two threads from a few years back. Maybe I don't Internet well enough. However, I'm sure we have many new members now (I've read MMM for a long time but wasn't a forum member until relatively recently).

PPS By not being ridiculous consumers, we're already doing a great deal of good. I thank you all, as does the planet. Our speakers are at 10, let's turn them up to 11.

[deborah]

It is part of the difference between being frugal and being cheap. I think that many mustashians struggle with the difference between these concepts, and what they view as cheap and frugal, particularly "badass" which is often the boundary between the two.

I am very happy to pay whatever tax the government decides they need. I am happy to minimise it, but I am going to pay what they say I should. Yes they may spend it on things I don't approve of, but tax is there in part to provide a safetynet and in part to provide services like roads, libraries and public transport that we use all the time. Trying to evade tax is cheap rather than frugal.

I don't want to get into benefits that are not meant for me - to me that is being cheap rather than frugal.

Not giving to charity is also cheap rather than frugal.

My best friend was a single mum. She didn't get any support from the child's father, worked part time and earnt just enough. Received no government support. She was very frugal. She also covered books at her daughter's public school, ran the charity shop at the local church, made jams and preserves for the church fete, and earnt awards for her contributions to other groups. If she could give, anyone can. Despite her death being very sudden, people came from far and near for her funeral, the church was overflowing, and everyone spoke of their own experiences of her giving.

But my definition of the two terms is my own. Each of us has a slightly different definition because we are each on our own FIRE journey. But we should all examine our own definition often to ensure we really are being frugal rather than cheap.

[NICE!]

The way I see it is that if you still have to work for a living, you can't afford to donate to charity.

Charitable giving is for rich people.

If I end up as ridiculously rich as I'm planning, then I will donate generously to charity. Until then, I can't afford it.

Once I'm rich, my donations to charity will likely exceed the lifetime donations of the average American, so you can't seriously call this uncaring.

Nearly everyone can help. Think about the other billions of people struggling to get through life.

Have you spent any time in the developing world? Even destitute people are helping each other out all of the time. It is often family, but their concept of family is frequently far larger than ours - it includes friends, fellow villagers, fellow church members, and more.

Also, side note: you're already rich. And again, this may not apply to you, but for the vast majority of people, their habits will remain the same. If they don't give now, they won't give later and if they do, it won't be nearly as much as it would've been if that had the habit all along. And while I didn't use the word "uncaring," I absolutely can call this uncaring. People are starving, dying, or being oppressed now and we're rich. We can help now. They need us now.

Not giving to charity is also cheap rather than frugal.

My best friend was a single mum. She didn't get any support from the child's father, worked part time and earnt just enough. Received no government support. She was very frugal. She also covered books at her daughter's public school, ran the charity shop at the local church, made jams and preserves for the church fete, and earnt awards for her contributions to other groups. If she could give, anyone can.

But my definition of the two terms is my own. Each of us has a slightly different definition because we are each on our own FIRE journey.

Your best friend sounds like a great woman.

I agree that it is cheap rather than frugal for some people who share our views on money. I think the last line is dangerous, though - it is carte blanche to skip charity.

[2Birds1Stone]

The way I see it is that if you still have to work for a living, you can't afford to donate to charity.

Charitable giving is for rich people.

If I end up as ridiculously rich as I'm planning, then I will donate generously to charity. Until then, I can't afford it.

Once I'm rich, my donations to charity will likely exceed the lifetime donations of the average American, so you can't seriously call this uncaring.

This ^

I donate here and there to causes I believe in. I would rather pay it forward in my personal life however, and do so regularly.

[Leisured]

i am astounded that people should give nothing to charity. It is a matter of proportion. I give $50 a year, tax deductible, to the Fred Hollows Foundation which cures cataracts in eyes in poor countries. That gift is about 0.1 percent of my gross income, so it is next to nothing. Obviously I can afford it.

[pipercat]

I've often heard the line "I give my time instead of money." Charities need both. It is really awesome that you give your time, but don't act like that is a 1:1 replacement for cold, hard cash. The blind orphanage appreciates me stopping by, as do the kids, but they needed food more than they needed my presence. Time does not replace money, nor does money replace time.

^^ Yup! This has always bothered me as well.  It's not unique to this forum, I hear it IRL all the time. 

[kathrynd]

IMO, people who give money or time to a charity, do it because it makes THEM feel good.
It really is a very selfish act.


In our chosen charity, we give our time, and we absolutely love it.

With our tax dollars, we give money to charities the government has chosen.

[Monkey Uncle]

Last year my wife and I gave a little less than 2% of our gross income to charity.  Still, this was our third largest discretionary spending category, and our seventh largest spending category overall (in order: taxes, food, housing, health insurance, home repair/maintenance, car insurance, charity).  While we may not make the same impact as Bill Gates or Doris Buffett, I feel like we are at least doing something.  My wife also donates a tremendous amount of her time (hundreds of hours a year).  I put in a lot less time because I'm still working full time. 

I do feel guilty, though, about saving 35-40% of take home when so many people around the world are suffering from unimaginable poverty.  I can't imagine how someone who lives in a first world country can reconcile themselves with not giving anything.  Saying you'll do it after you get rich is a cop-out. 

[clarkfan1979]

Giving later when, "I am rich" is a little undefined. However, I do plan on more charity work when my wife and I are FIRE. This will include both donating my time and money. My wife and I probably gave less than 1% of our income last year ($500). We also donate to goodwill and purchase from goodwill.

What about someone who is FIRE and donates 20 hours of their time a week to a charity but does not donate any money? What about a carpenter who normally makes $25/hour is FIRE and helps build houses for habitat for humanity? They are giving 26K worth of their time, but never contributed a dime of income.

I am personally more comfortable donating my time than money. When I am older and FIRE I will also have more time to research different charities. 

[shitzmagee]

With our tax dollars, we give money to charities the government has chosen.

^this!

I pay taxes and serve in the military...that's the extent of my charity and I'm perfectly ok with that. If OP or someone else wants to judge me as not giving enough, then they can donate on my behalf. Either way, I'm still going to sleep well at night with my personal choice to donate in the form and fashion that I do.

[NICE!]

Military? That seems questionable at best. I'm also in the military. This is a necessary function in society, but it certainly isn't a charity.

I feel like many people haven't responded to the central premise - we are already rich and there are people who really need help. Except for people with super individualist philosophies, I don't see how you can justify that. Basically I hear you saying you don't want to do it, and then attempting to justify your position with other reasons. Like someone said in another thread regarding marketing/sales - people buy on emotion and then use other means to justify their purchase.

I just can't see how you can't fit in, at a minimum, a couple hundred bucks a year to MSF. Or Goodwill. Or the local food bank. or libraries. Or Catholic Charities. Or Charity: Water. Pick your poison, there are many people/orgs doing great things.

[caliq]

The way I see it is that if you still have to work for a living, you can't afford to donate to charity.

Charitable giving is for rich people.

If I end up as ridiculously rich as I'm planning, then I will donate generously to charity. Until then, I can't afford it.

Once I'm rich, my donations to charity will likely exceed the lifetime donations of the average American, so you can't seriously call this uncaring.

This ^

I donate here and there to causes I believe in.

+1

I don't give a substantial amount right now; I'm still in school and we're still digging out of debt.  It's not high interest debt so when something comes up I do give a little bit here and there (ie. last week there was an 8 week old Great Dane puppy with a congenital defect that the owner couldn't afford to fix, and the breeder said to just euthanize; the Dane rescue here took her in and was raising $5000 for the semi-urgent surgery....I donated $50--and she had the surgery yesterday and they just posted a video of her playing with a stuffy in the recovery room and it was definitely worth it!).  I can afford to do stuff like that but not something like 10% of my income. 

Once I reach certain goals, I'll give more, but I don't think I will ever feel comfortable giving 10% (unless my income somehow gets substantially higher than I expect).  I have two rescue dogs and my husband served in the Marine Corps; I want to do medical research and am consciously taking a path that will lead to lower overall lifetime income than other paths I'm equally (if not more) qualified for, because I want to be able to make a difference in people's lives.

There's ways to give back to society without the traditional monetary donations to official charities.   

NICE! -- I can see your point about military service.  I don't want to speak to the character of yours, but my husband came out of his with a serious neurological disorder (he's literally missing an entire species of neuron) that is going to impact him every second of every day for the rest of his life.  He gave A LOT to his country, and it's because he gave so much that our current income doesn't really support a budget line for even a couple hundred dollars a year  of charitable giving.  It probably adds up to that much over the course of the year, but everything I donate comes out of a different budget (I have $50 less to spend on groceries in Feb because I gave to that puppy).  So while I get your premise...'cop out' sounds pretty harsh to me.

[Dimitri]

I save my aluminum cans and when I have a full bag I leave it next to the dumpster behind my office.  Typically within a matter of minutes one of the homeless has taken them.  That and donations of clothing and household goods to the Salvation Army comprise my charitable giving.

When it comes to dollars and cents my favourite charity is myself.

[plherrin]

We've been steadily giving to charity, but base it off of our living expenses. Briefly this is our logic:

We give 10% of our yearly spending and give it to charity. This isn't because we always look for the most efficient uses of charity money only- it's to re-center ourselves and remind us in this specific area of our lives that we must be empathetic and that there are others out there who struggle in ways we don't fathom. We try to do this with our time also and our consumption- be generous and do so in an empathetic spirit.

That being said, to me it makes more sense to use money to make more money...and live off of a small bit of the return without actually losing ANY of the principle AFTER adjusted for inflation. That's where that 4% comes from, right? So to me you'll be giving more if you hold out, save, and invest....THEN give money. And all those suffering people? I'm afraid they'll still be with us. Could we do more today? Yes, but I think in terms of efficiency it's best to save, live a less consumptionist lifestyle, and plan to pass it all on to those in need later, when the pot will be larger than if we gave small, unconcentrated amounts throughout life.

Just to be clear we give some now which is LESS EFFICIENT than saving and giving later. However I think the reminder to ourselves via losing some $ is more important than the efficient use.

I think it's also important to remember that we all have different value systems and philosophies of life on this board but are united by a common philosophy on our desire for freedom from the requirement to work and thus the desire to take the helm of our lives and claim our independence (financially). So to paint others as selfish who pursue this as a first/main focus goal I think misses the point of why they're with us on the board in the first place. And really if they end up donating large sums later it was likely a more efficient way to donate $- though as I said we're doing it different here.

Cheers!

[Setters-r-Better]

I definitely feel like that's what taxes are for.  If there is so much unmet need in the world, taxes should be structured to meet those needs so that all members of society contribute fairly. The more generous and caring members of society shouldn't have to shoulder the burden of social program shortfalls.  Not fair.

[NICE!]

I can afford to do stuff like that but not something like 10% of my income. 

Once I reach certain goals, I'll give more, but I don't think I will ever feel comfortable giving 10% (unless my income somehow gets substantially higher than I expect).  I have two rescue dogs and my husband served in the Marine Corps; I want to do medical research and am consciously taking a path that will lead to lower overall lifetime income than other paths I'm equally (if not more) qualified for, because I want to be able to make a difference in people's lives.

There's ways to give back to society without the traditional monetary donations to official charities.   

NICE! -- I can see your point about military service.  I don't want to speak to the character of yours, but my husband came out of his with a serious neurological disorder (he's literally missing an entire species of neuron) that is going to impact him every second of every day for the rest of his life.  He gave A LOT to his country, and it's because he gave so much that our current income doesn't really support a budget line for even a couple hundred dollars a year  of charitable giving.  It probably adds up to that much over the course of the year, but everything I donate comes out of a different budget (I have $50 less to spend on groceries in Feb because I gave to that puppy).  So while I get your premise...'cop out' sounds pretty harsh to me.

I wasn't using 10% as a rule, it is just what I do. As I said, I don't feel that my giving is sufficient. My desire to give more and save money are currently competing against each other. The number for one person will be different for another. I'd say it'd be pretty ridiculous if Warren Buffett only worked with the 10% rule.

My condolences for your husband's injuries. Obviously every case isn't the same when it comes to anything - whether that be military service or charitable giving. I think you know that I wasn't speaking to a family like yours. But, as you demonstrated, you've found a way to give from time to time. That's what I'm getting at - we can generally afford to do something.

I definitely feel like that's what taxes are for.  If there is so much unmet need in the world, taxes should be structured to meet those needs so that all members of society contribute fairly. The more generous and caring members of society shouldn't have to shoulder the burden of social program shortfalls.  Not fair.

Well, the government doesn't measure up in this area and it probably won't ever do so, so we must act individually and collectively. I don't know that I agree that it is the government's job, but regardless of the politics it isn't happening nor will it. So, yeah, the more generous and caring members do have to pick up some slack, as you said it. If we can get some more people on board, maybe that won't be true.

[MoneyCat]

I donate plenty to charity.  The people who don't may make excuses for themselves, but they are really just selfish and cold-hearted.

[AllezAllezAllez]

In the most important ways, I already AM rich: I come from a solid, loving family who gave me a good upbringing and education, I am self-supporting with a stable job, and very comfortable with respect to food, clothing, and shelter. Many people in my own community are lacking these things, sometimes (as with children) through no fault of their own.

And look, everyone screws up sometimes, and I think it's important to give a hand to those people who maybe HAVE screwed things up but are making an effort to change. Is a recovering drug addict any more reprehensible, really, than a recovering starbucks or BMW addict? A lot of people do stupid things for a short-term rush -  not much difference in the grand scheme of things, I think. And everyone needs support when they're trying to do better. For most people in my community that doesn't happen on internet message boards, but in real life. So I give significant amounts of money and time mostly to small local organizations that help people who need it, whether it's serving meals at the soup kitchen or helping families afford tuition at the only good school in town, or donating office-appropriate clothing to the group that helps outfit women for job interviews.

Altruism is a complicated phenomenon, but for me it comes down to a belief that every human being has the same intrinsic worth, even the creepy homeless guys who make my walk to work scary. (These guys have problems that I can't solve, and maybe nobody can, but they are still people, and they can't be left to starve; hence the soup kitchen.) As a fellow human being I am to some extent responsible for others, and it's lazy (and wasteful!!) to say "let the government take care of it all." Local problems, especially, are best addressed at the local level.

If, deep down, you think some people are merely trash, then of course you're not going to be altruistic. But if you think otherwise, you act accordingly.

[kathrynd]

Some of the charities have grown so large, that corruption, is common.
Other charities, only a small portion go to them, but administration eats up the rest.

As I said, we prefer to give our time, because we enjoy it.

If someone wants to give some, most or all of their money to a charity...go for it.
Doesn't make them any better, than someone who chooses not to.

[PeachFuzzInVA]

I make small donations a few times a year to Stop Child Abuse Now, but I don't give as much as I otherwise would because the government takes enough already. At the beginning of 2014, I sat down and figured out that I gave 52% of my income in 2013 to the government in the form of taxes ranging from income taxes and property taxes to sales taxes. A portion of that goes to charities whether it be social safety nets, corporate bail outs, or foreign aid. If someone wants to look down on me for choosing to retain the remaining 48% of my income, so be it. I'd much rather be able to pick and choose which charities my earnings go to, but the U.S. government doesn't give me that option.

[Turkey Leg]

How much money gets donated is not something I'll judge others about, only myself.

I always think of it this way: When I'm lying on my death bed (or is it "laying"? never could get those two straight), what will I be thinking?

Will I be thinking, "I wish I'd tucked away more in my investments instead of giving it away"?

I don't think so, so my budget reflects that. But each has to decide for himself/herself.

[Dr. Doom]

I give back.  Perhaps not as much as I could or should, but it's something.  It took a life changing event for me to realize how important it is to contribute to organizations that are saving lives and reducing human misery. 

Prior to that I had lots of excuses for not giving, but number one was that I simply grew up poor and it took me a long time to realize that I "had enough" to enable me to responsibly give back.

I also have been giving blood at least 4x a year since 16, which I feel great about and is absolutely free -- I sort of consider that charity.

MMM himself advocates some amount of giving, see this post.

But as others have mentioned, these are very personal decisions.

[Metta]

I sporadically donate to a few charities that are personally meaningful directly, we have money taken directly out of paychecks for United Way so that it is invisible to us and does not appear in our budget, and we have a line item in our yearly budget for disaster relief since we know that we will be giving when the next tsunami, major flood, earthquake, etc. happens.

My grocery budget is fairly large and flexible and some of that goes to charity, though not much. As I wrestle some of our expenses down maybe a bit more can go to charity.

I volunteer once or twice a year to salve my conscience, but I will be honest here. I hate being charitable in person. It means a whole new group of people that must be learned and met, which can be difficult. It always feels like the first day on a new job with the possibility of making a very big mistake and hurting people. And at the end, I am embarrassed when I am thanked.

I'd rather throw money at the problem of unmet need than wade out and meet the need myself. However, once I am retired, I will not be able to maintain this pretense that I am a good person without giving something back directly. I am giving this a great deal of thought on what to do. I used to teach ESL to immigrants and refugees. I may return to that. I know that I could never do animal rescue work. I don't want to spend my nights crying or haunted by what I have seen. (My Facebook friends keep posting images of wounded and abused pets. It's soul-destroying to see what people do to those who are helpless!)

So that is what I do. However, I'm not posting my budget for all to see. Many people who do are in desperate financial situations. If you are bleeding money to credit card companies and have large debts, you should not be charitable at that time. That is definitely a time to save yourself first so that you will have money to give in the future.

[NICE!]

Some of the charities have grown so large, that corruption, is common.
Other charities, only a small portion go to them, but administration eats up the rest.

As I said, we prefer to give our time, because we enjoy it.

If someone wants to give some, most or all of their money to a charity...go for it.
Doesn't make them any better, than someone who chooses not to.

Some doesn't equal all. Do your due diligence and find ones that will do well with your money, too. They need both time and money.

And to others in the thread, I wasn't stressing on how much, whether it be $1, 10%, or 50%...I was discussing the concept itself.

[pachnik]

My usual charitable giving pattern is this: donations at Easter, Thanksgiving and Christmas for festive dinners for people who can't afford it and then a summer donation to help send an underprivileged kid to camp.  The money goes to an organization in our poor part of town for folks who are struggling or down on their luck or simply have problems with addiction and/or mental illness.  This particular organization offers good, shelter, clothing and counselling to people who need it.

I don't donate if I am not working.  I have also noticed I am not giving as much as I used to since I am feeling insecure at work.  This comes from being fired last year. 

When I am retired, if my health is good, I will donate my time.  Lately with job changes and moving 2X last year, I haven't looked around for any volunteer work - just no energy to do that. 

[BlueMR2]

Between 10% - 15% of my yearly expenses are charitable donations.  Some say I should give more (like 10% of my gross income).  Others say I shouldn't give any since I'm still working.

I'm happy with this amount.  It delays my FI, but if I were to lose my job, I can immediately cut my expenses by that 10-15% as well, which makes a big difference...

I'm very picky about where I give too.  IMNSHO, 99.9% of the charities out there are scams.

[Roots&Wings]

The way I see it is that if you still have to work for a living, you can't afford to donate to charity.

Charitable giving is for rich people.

If I end up as ridiculously rich as I'm planning, then I will donate generously to charity. Until then, I can't afford it.

Once I'm rich, my donations to charity will likely exceed the lifetime donations of the average American, so you can't seriously call this uncaring.

This ^

I donate here and there to causes I believe in. I would rather pay it forward in my personal life however, and do so regularly.

+1

I give small amounts to causes that mean something to me, and microlend ~35% of my income to people in developing countries (which gets paid back hence is not charity, but in my opinion serves a decent purpose in the interim). 

Considering opening a charitable giving account once FI (e.g. Vanguard or Fidelity Charitable, although I'm not crazy about the administrative fees); already have charities as beneficiaries in case of untimely death.

[Emilyngh]

Thank you for posing this.

I must admit that I've been a MMM who uses both the "I donate time" excuse as well as the "I'll donate money after I'm FI" excuse.   I did recently spend time looking into the most cost-efficient charities (ie., those that save the most lives per dollar), but have just been sitting on the information.    Reading this thread has prompted me to setup an automatic deduction every month to donate to one of these.   

Really, I just cannot justify being in my position and not spending $10 a month, or $50 dollars a month (or whatever other small amount) to literally save lives.

If anyone else is curious, this is my list of effecient and effective charities that I'll be picking from: http://www.givewell.org/charities/top-charities

[pipercat]

This thread has also prompted me to re-examine my giving.  I used to give a specific amount each month, but I stopped.  Then I only gave during holidays or whatever.  My charitable giving last year was $75.  That's it, and I know I can do better.

So I'm off to change that item in my budget.  Thanks for this thread!

[RetiredAt63]

We did have this discussion before, I think it was in a thread about tithing.

A pattern that emerged was that people in countries with good government safety nets gave less, because their taxes were taking care of social issues that are looked after by private charities in countries with less extensive government safety nets.  More money going to government for its support network meant less available for private giving, and less need for private giving.  This did not mean they gave nothing, because there are always charities that do not have government support, for many legitimate reasons.

The original tithe to the church (I am thinking medieval England here) was used to a large extent for social supports.  The discussion also developed that church tithes could be divided into two categories - one was a true charity giving, the other really was a membership dues that maintained the social structure of the church for its members.

Plus we need to remember that time is valuable - some volunteers may just be doing the same thing that a salaried person could do, but some are not.  For example, my dog and I are a certified therapy dog team.  Therapy dog (and cat) teams go to seniors' residences, hospitals, children's reading projects, and this is not a service that can be easily bought.  Yes it is a charity and needs donations, because there is always infrastructure - just testing teams takes money.  But the teams?  We are all volunteers, we own and look after our pets.

As a side note, for those who are interested, I am certified with Therapeutic Paws of Canada, but there are others.  You can find out what is involved if you go to their web site.

[Sid888]

This question is one that I go back and forth on all the time.  Not giving to charity until X time is the most efficient way to FIRE and it also does send a small protest message about how the uber-wealthy, that have uber FIREd, need to spend their tax cuts on charity instead of other material things (I usually think this thought while listening to yet another NPR pledge drive while in the shower).  However, I don't disagree with the sentiment on here that we should help others because, in the grand scheme of things, we are all doing pretty well.

I try to give to charities that help me as well.  For instance, if a client or friend asks me to help a good cause with time or money, I will.  This builds good will with both clients and friends and charitable events are also very good networking as well.  Donating time to a cause or event - or even organizing a charitable event yourself - can also be very good networking and provides positive exposure of you and your business.  When you add in the tax deduction and business development aspects of an event, charitable giving can sometimes advance your FIRE plan. 

The good karma and good personal feelings  that you develop from charity involvement should be the only reason for a donation but in the "ownership" society we all find ourselves in now, it helps to also have a business reason that advances your personal FIRE plan.  I know that this is not "pure" charity - just like tithers who believe they will make more cash if they tithe - but it's just how I rationalize my giving away of assets that, with compounded interest, could be quite large in 20-30 years.

[RetiredAt63]

One thought on donating your time versus your money - you can always get more money, but time is a finite resource.  So when I donate 5 hours/week to various activities, those 5 hours are gone forever.  In that light, I think donating time is more valuable than donating money, or at least there is a greater personal cost.  This assumes that you are careful in your choices, that neither are wasted.

[Tabaxus]

One thought on donating your time versus your money - you can always get more money, but time is a finite resource.  So when I donate 5 hours/week to various activities, those 5 hours are gone forever.  In that light, I think donating time is more valuable than donating money, or at least there is a greater personal cost.  This assumes that you are careful in your choices, that neither are wasted.

If you want to be really utilitarian about it though, if you could make more money in X hours than it would cost the charity to hire someone for X hours, you really should make the money and donate, rather than donating the hours.  For whatever reason, people don't seem to think in those terms, though.

Personally, I'm in the camp that I cannot "afford" charity until I have purchased my financial freedom for my spouse and me and a college education for my kids (if I end up having any) and my godson.  If someone wants to judge me for that, I couldn't really care less.  I do have some "charity" that I basically must do as a professional obligation--casual for a cause type of stuff in the office, pro bono time.

[Villanelle]

We do donate some, here and there.  No idea what % of income, but >5%, certainly.

Part of our plans for FIRE are to donate more--both time and money.  I figure I can do better with that money than a non-profit will.  (Having worked in the non-profit world for many years, I feel pretty comfortable saying that.)  So I can give them $10 now, or $25 later, which will have more value, even inflation adjusted.  We plan to work past our FIRE #, for various reasons.  But once we'v reached a point where that money is extra, then we can donate it, having grown it at ~7% for X years, but also having held on to is so that if we do end up needing it, we have it.   

[Retire-Canada]

Most of us tend to agree that we live in an era where we can eat healthy things, have reasonable health care, and make gobs of money (if we live in the developed world). Many people here save an incredible sum of money every month - I am truly impressed with the resourcefulness, lack of waste, environmental responsibility, and even social responsibility of so many people on this forum.

I plan to give away my money when I die as I have no kids. I started another thread talking about how MMM/ER types that end up with investments that are fortunate enough to grow to large sizes deal with the excess money.

http://forum.mrmoneymustache.com/ask-a-mustachian/what-the-f**k-do-i-do-with-all-this-money/

Throughout my high earning days I have always generously provided for people in my life who had less. Both with their knowledge and anonymously. I would say this amounted to ~5%-7% of my aftertax income at the time. I earn a lot less now and give less so it's more like 2% today.

I could give more, but an ER strategy is still quite risky at the beginning since negative returns at the start of your retirement phase can derail the whole plan unless you have saved enough to deal with the potential downturn.

So I feel like right now is the time to help people I know and try and become FI.

Once I am FI I will earn a lot less and maintain the same level of giving within my community of friends, but that will be ~4% of my income.

If my investments do well and I get to 71 with a lot of money I'll setup scholarships or a charitable trust to distribute the income from my investments to areas I care about when I die.

When I am in the middle of my life I need my money working hard for me as I don't know what will happen. At the end of my life I can project what I really need and evaluate what I have accurately.

I also think giving $10K to a charity in 2015 is helpful, but giving $5.5K [inflation adjusted] to a charity each year after 2070 forever is much much much better.

$10K at 5% [after inflation] for 55 years = $146K x 4%/yr SWR = $5.6K.

Keeping that $10K until I die also helps ensure I don't need that charity and won't draw down their limited resources.

-- Vik

[minority_finance_mo]

It's definitely not a black and white issue. First and foremost, it's a values call: some people (like you, OP) feel a moral obligation to give back and support those less in need. You feel a sense of duty to commit your resources to those who have less and are in serious need, the destitute, the homeless, the blind, etc. That is what you value and you "put your money where your mouth is" by donating 10% of your income to causes which you deem worthy. As is your right.

On the flip side, however, there are people who have different values than you and it is their right to live their lives in a manner they see fit, and to spend their money for causes they value - whether that be freedom (as espoused by much of this forum), or a vacation with their families, or what have you. And that is their right. Their money is going to causes they value. And that's okay.

I donate plenty to charity.  The people who don't may make excuses for themselves, but they are really just selfish and cold-hearted.

No one gets to dictate how someone else spends his or her money; he/she may not be spending it in ways you consider meaningful, but then that doesn't really matter - does it?

Why do so many people who can save & make so much money feel that it is OK not to give back?

Finally, I think everyone does give a fair bit to "charity," though it's a charity that we also tap into at times, in the form of taxes. Did you know 58% of every dollar you give to tax in the US goes to social safety net programs like Medicare, SS, VA, disability, etc? So really, you paid much more than 10% of your income last year to taxes, as did many others in this community. Good for us!

Flips side of the coin. Always good to see things in perspective and not make blanket statements.

[kander]

I don't give money to charity. Why not? Because in Holland most charities have managers which such high salaries that it feels like I'm paying them instead of the charity. Also, many charities here pay their marketeers money to find new sponsors / donators donors. So when you become a donator donor, you pay for that salary to. As long as the situation stays that way, I'm not giving a penny to charities.

But that doesn't mean I don't care about people. I have other ways to help. I give stuff away to the food bank, for instance.

[iris lily]

I gave 30% of my inheritance to charitable organizations that I like. We give several thousand dollars a year to organizations. Plus, we do lots of work in the community although those are not charities those are community organizations.

DH is very tight fisted when it comes to giving money to good causes. So I always have to fight that.

However if I add up what percentage of my taxes go to social do-gooding,I might be covered at 10 percent. When Nanny G steps in to cover human services that old guideline of 10 percent giving may not be relevant OR it may be that I am, in fact, giving 10 percent through taxation.

[deeshen13]

Been lurking MMM for a long time, and due to this thread decided it was finally time to join the discussion.

In a time where most the developed world has access to shelter, food, clean water, electricity, education, work, healthcare, easy transportation, infrastructure, plumbing, and more abundance than any time or place in human history, I wonder if it's selfishness or ignorance to not give a little back to the impoverish, destitute, starving, disease-stricken, war-filled areas of other parts of the world.

I ponder if these people have ever been outside the developed world to places in Latin America, South America, Africa, SE Asia, and more -- nonetheless the homeless shelters right in our backyard in the USA.  Once you've seen a family of 10 smashed in a hut with no basic amenities in Nicaragua, or massive children orphanages in Peru, that type of cognitive dissonance has no choice but to change your world view.

And it's precisely cognitive dissonance that I think causes people to fight back so hard about giving back more.  It challenges them to their core as to how they've lived thus far.  The old adage is there's a million reasons not to do something, but you only need one reason to act.

I'm a graduate student who had an adjusted gross income of $12,000 in 2014, and gave $2,000 to charity.  To the poster who says giving back is actually selfish -- I don't feel "great" or whatever your proposition is by giving; I feel it's the right thing to do.  Save The Children is a charity that gives 94% of donations directly to final recipients, only 6% to administrative.  I sponsor a child Javier in Ecuador who lost both his parents before ten, and the money goes directly to food/water/elementary education.

Finally I leave you with Bob Dylan:

Let me ask you one question
Is your money that good
Will it buy you forgiveness
Do you think that it could
I think you will find
When your death takes its toll
All the money you made
Will never buy back your soul.

[resy]

I really like you NICE!, wish we were friends irl lol I too share your feelings and get what you are saying.
I understand what your point is and I agree, we CAN all do something. Right now, my husband and I dont have much disposable income (we are paying for school for both of us and have a kid to support) yet we find a way to give both monetarily(again,not much but what we can) and with time and you bet that as our properity increases so will our giving :)
I use to feel the same way about a lot of the ppl in this forum and it was starting to turn me away from it-it is hard to see so much selfishness (there, I said it) with so much abundance but then I realizes thay it boils down to a life philisophy and a lack of exposure. I believe that a lot of ppl truly and simply cannot empathize and it comes out largely out of lack of exposure. It is not an excuse but it is a big contributing factor. I personally was born in a developing country and from spending a couple years there I was greayly impacted-the memories of fucking children coming to me (then a teenager) obviously starving for money haunt me. You feel their desperation in a way tv, radio or any other media cannot get across to simple viewers in their homes. I believe this lack of exposure is what also makes it easier for ppl to forget that these are real ppl in real life that need this help.
Dont get consumed with the selfishness of others (Im sorry but if you are in a developed world, have income and give nothing or just your cast offs when you could give more then yes, you are selfish), the world is that way and it probably always will be, instead use those negative feelings as a personal motivator/cataclyst for yourself.
and just to make it clear, OP is not saying that if you dont give a large portion of your money you arent doing anything, this is intended to the people that give nothing and have much or maybe .01% and call it good (but are happy to get over on others, etc).

[Goldielocks]

I definitely see a need to give more, we are typically well under $1000 per year...

Normally, I give based on my ability to buy things for me.  If I can buy the nice sneakers, I put a larger sum to charity.  Vacation? Some for me and some for you....  I have one regular charity that this system works well with.  It also reduces my spending by driving up the "cost" to me.

I don't think we should donate based on our annual incomes or fixed costs, but on the lifestyle choices.

I am also having trouble finding a charity that will use money better than I can, for a cause I believe in..I have found only a couple so far...  (The destitute are provided fairly well through our taxes)

[Gin1984]

I actually have a list of charities that I plan to donate to when I get financially independent.  Not when I retire but when I do not have to depend on a job for income.  I have a child and my top priority is to be able to take care of her and myself.  Given the job market, I don't trust that I will always have income.  I watched my mom want to retire and not being able to.  I also have some medical conditions so need health insurance.  Charity is very important but I was to make sure I don't need it first. 

[resy]

It's definitely not a black and white issue. First and foremost, it's a values call: some people (like you, OP) feel a moral obligation to give back and support those less in need. You feel a sense of duty to commit your resources to those who have less and are in serious need, the destitute, the homeless, the blind, etc. That is what you value and you "put your money where your mouth is" by donating 10% of your income to causes which you deem worthy. As is your right.

On the flip side, however, there are people who have different values than you and it is their right to live their lives in a manner they see fit, and to spend their money for causes they value - whether that be freedom (as espoused by much of this forum), or a vacation with their families, or what have you. And that is their right. Their money is going to causes they value. And that's okay.

I donate plenty to charity.  The people who don't may make excuses for themselves, but they are really just selfish and cold-hearted.

No one gets to dictate how someone else spends his or her money; he/she may not be spending it in ways you consider meaningful, but then that doesn't really matter - does it?

Why do so many people who can save & make so much money feel that it is OK not to give back?

Finally, I think everyone does give a fair bit to "charity," though it's a charity that we also tap into at times, in the form of taxes. Did you know 58% of every dollar you give to tax in the US goes to social safety net programs like Medicare, SS, VA, disability, etc? So really, you paid much more than 10% of your income last year to taxes, as did many others in this community. Good for us!

Flips side of the coin. Always good to see things in perspective and not make blanket statements.

I would argue that it isn't some inherent moral code inside ppl like us, instead its a simple awareness of the world and other inhabitants of it.
Most importantly, I am so sick of this "its their right" cop out! Is it? Really? In a world where the citizens of developed nations hold unfanthomable advantages over the citizens of others you are going to tell me that you have all the right to do whatever with all that money you've earned or the things you've bought at someone else's expense? (Because there's always someone that gets the short end of the stick) And not even give a little back?
It really is a sickening cycle-the ones that have the most get more (in natural resources, wealth, etc) and instead of seeing it as the big advantage of being born/living in a powerful country and the social injustice of it they see it as their god damn "right"! Lol oh boy.
I agree though, it is people's  "right" ( legally) to not give to the less advantaged but I would really love for ppl to actually own up to it and leave it at that. Just say you are selfish and leave it at that and end of story.

[minority_finance_mo]

I would argue that it isn't some inherent moral code inside ppl like us, instead its a simple awareness of the world and other inhabitants of it.
Most importantly, I am so sick of this "its their right" cop out! Is it? Really? In a world where the citizens of developed nations hold unfanthomable advantages over the citizens of others you are going to tell me that you have all the right to do whatever with all that money you've earned or the things you've bought at someone else's expense? (Because there's always someone that gets the short end of the stick) And not even give a little back?
It really is a sickening cycle-the ones that have the most get more (in natural resources, wealth, etc) and instead of seeing it as the big advantage of being born/living in a powerful country and the social injustice of it they see it as their god damn "right"! Lol oh boy.
I agree though, it is people's  "right" ( legally) to not give to the less advantaged but I would really love for ppl to actually own up to it and leave it at that. Just say you are selfish and leave it at that and end of story.

See that's exactly the problem. You know absolutely nothing about anyone's giving or circumstances and you're willing to take a holier-than-thou attitude and assumption. I was actually born in a "third-world country", and my parents took the risk of coming here, lived in a one-room studio for 2 years with 5 people people. My dad worked nights for over a decade, 70+ hours per week, gave to charity and has nothing to show for it at 55 besides a plethora of stress-related medical conditions. Now I have a fairly decent salary, having been helping my family so my parents don't need to kill themselves working, and still save a decent amount. Oh, and we support family back in our home country who don't make enough for basic shelter/food without our contribution.

I'll be damned if I let your privileged ass tell my privileged ass that I'm selfish. And if I was, again within reason it would my damn right.

---

EDIT: I want to clarify that the point of this story was not to explain myself to either OP or rest, as I owe neither of you explanations for my decisions. The point was to point out that you both came with incredible holier-than-thou attitudes and morally attacked anyone that disagreed with your points of view with words like "selfish," "cold-hearted," and "sickening". Tone down the rhetoric, you know our usernames, not our stories.

[deeshen13]

Moreover, for those with the, "The money doesn't get to the people in need but lines the pockets of administrators" excuses, here's a list of 50 great charities with 80-90% of donations going to the end-user.

http://www.csmonitor.com/Business/Guide-to-Giving/America-s-Top-50-charities-How-well-do-they-rate

PS. Save The Children is awesome because it puts you in direct touch with a child in a developing country.  There is an exchange of letters and pictures every few months or so.  This can be an awesome tool if you have kids yourself to help teach them kindness, perspective, and compassion.

[Eric]

Why do you consider giving small amounts now to be more impactful than giving large amounts later?  I view it the opposite way.  I've always viewed a large lump sum donation as having much more impact than a periodic hundred bucks.  Like Vikb said above, charities can use your small payment to help someone today, or they can use your huge lump sum payment to help people forever.

[Gin1984]

Why do you consider giving small amounts now to be more impactful than giving large amounts later?  I view it the opposite way.  I've always viewed a large lump sum donation as having much more impact than a periodic hundred bucks.  Like Vikb said above, charities can use your small payment to help someone today, or they can use your huge lump sum payment to help people forever.

Also for some small charities it is easier for them to get stable, long term donations that they can rely on, than random donations especially if you end up paying by credit card.

[resy]

I would argue that it isn't some inherent moral code inside ppl like us, instead its a simple awareness of the world and other inhabitants of it.
Most importantly, I am so sick of this "its their right" cop out! Is it? Really? In a world where the citizens of developed nations hold unfanthomable advantages over the citizens of others you are going to tell me that you have all the right to do whatever with all that money you've earned or the things you've bought at someone else's expense? (Because there's always someone that gets the short end of the stick) And not even give a little back?
It really is a sickening cycle-the ones that have the most get more (in natural resources, wealth, etc) and instead of seeing it as the big advantage of being born/living in a powerful country and the social injustice of it they see it as their god damn "right"! Lol oh boy.
I agree though, it is people's  "right" ( legally) to not give to the less advantaged but I would really love for ppl to actually own up to it and leave it at that. Just say you are selfish and leave it at that and end of story.

See that's exactly the problem. You know absolutely nothing about anyone's giving or circumstances and you're willing to take a holier-than-thou attitude and assumption. I was actually born in a "third-world country", and my parents took the risk of coming here, lived in a one-room studio for 2 years with 5 people people. My dad worked nights for over a decade, 70+ hours per week, gave to charity and has nothing to show for it at 55 besides a plethora of stress-related medical conditions. Now I have a fairly decent salary, having been helping my family so my parents don't need to kill themselves working, and still save a decent amount. Oh, and we support family back in our home country who don't make enough for basic shelter/food without our contribution.

I'll be damned if I let your privileged ass tell my privileged ass that I'm selfish. And if I was, again within reason it would my damn right.

dude, you are being waaay too defensive. why? You ARE giving back and that's what matters. You dont have to send money to an established charity to be giving, there are many, many ways to give- and that's the point, that if we all gave back SOME the world really would be a better place.
I bet your dad has plenty to show for it, also bet there are many ppl that hold him in high esteem.
hey! I come from a 3rd world country with an immigrant family too so dont tell me my priviliged ass has the RIGHT to be priviliged ;)    (actually, right and privilage are oxymorons lol)

[Roots&Wings]

Why do you consider giving small amounts now to be more impactful than giving large amounts later?  I view it the opposite way.  I've always viewed a large lump sum donation as having much more impact than a periodic hundred bucks.  Like Vikb said above, charities can use your small payment to help someone today, or they can use your huge lump sum payment to help people forever.

I don't consider giving small amounts now more impactful than giving large amounts later. 

Personally do both because I find merit in both.  For me, it's a matter of weighing delayed gratification (save more now to have a larger sum in future) and immediate needs.

[resy]

Why do you consider giving small amounts now to be more impactful than giving large amounts later?  I view it the opposite way.  I've always viewed a large lump sum donation as having much more impact than a periodic hundred bucks.  Like Vikb said above, charities can use your small payment to help someone today, or they can use your huge lump sum payment to help people forever.

I dont think its necessarily that the OP views it as most impactful, just that the ppl not giving are more likely to not give in the future either.
One thing I personally think about giving now vs later is the opportunity cost of all the ppl that dont get helped while money is being held.