Author Topic: Funding Significant Charitable Giving Post-FI(semi)RE  (Read 1158 times)

Libertea

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Funding Significant Charitable Giving Post-FI(semi)RE
« on: September 21, 2017, 09:57:49 PM »
Here is my story again in a nutshell because I've been gone for a while:

Quit my FT job nine months ago.
Took six months off, including two months traveling abroad.
Started a new (relatively low-paying) semi-retirement job a few months ago and still working in my old career PT

Love the new job most of the time, although I don't have much in common socially with my spendthrift coworkers (who are otherwise nice enough people, but not so nice that I want to drop tons of $$$ to go to some fancy schmancy gourmet dinner with them).  Find the old career (which I didn't like) much more tolerable now that I'm doing it PT.  I'm even managing to max out my retirement accounts for this year and expect to again next year.

I'm going to be hitting a new crossroads though, because while I have been minimally FI since March of this year (which amounts to $600k to cover my own basic expenses sans any luxury items), I have a charitable habit that cannot currently be supported by my stash.  Including money that I give to help relatives, I currently spend about $1000/month on these donations.  I'm thinking I would need to at least double my minimum stash (to $1.2 million) in order to be able to give to charity at the level I'd like along with funding some luxury items for myself.  I anticipate being at around $800k once I'm done with my current contract, and I think I'd need to continue working PT for 3-5 more years after that (depending on how much more time I took off) to reach my inflated FI figure that would allow me to continue playing at being a philanthropist.  This is assuming that I would continue contributing to my stash during this time and not living off it.

Curious if any of you have budgeted for significant charitable giving in your FIRE budgets, and if not, do you or would you work PT to make up that shortfall until you have enough saved up to fund your charitable giving from your stash?  Obviously volunteering one's time is helpful, and I've been doing some of that too.  But some causes need cold, hard cash: I can't volunteer my time to pay for my niece's college tuition, and it's not possible to go to Houston, the Florida Keys, Puerto Rico, and Mexico City all at the same time to help out with disaster relief.

Tuskalusa

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #1 on: September 21, 2017, 10:13:06 PM »
I'm in a similar boat. I've been semi-retired for about a year. I work part-time for a nonprofit group. I love to be contributing to social good. The pay is low, but the work is interesting, and the extra cash goes mostly to family fun and charity.

I've found that the happier I feel in my semi-FIRE situation, the more cognizant I am that there are many people who are less fortunate. Every month, my charitable giving goes up. And I'm ok with that.  But I think there will come a time when I need a giving strategy and a cap of some sort.

I'm willing to keep working for now if it means I can continue to give. I'm thinking that I'd eventually like to move some funding to a donor-directed fund. This would essentially set up a charitable budget, and it would have some tax benefit. It wouldn't cover some of the Go Fund Me campaigns that I see popping up, or other giving I like to do, but the majority of giving would be covered.

It's nice to hear from someone with a similar conundrum on giving. Please continue to share and additional ideas you discover on how to help others while still taking care of yourself!

NorCal

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #2 on: September 21, 2017, 10:20:21 PM »
I haven't budgeted for it in dollars, and don't plan to.

I am seriously considering major donations of time to worthy causes after FIRE.  I'd love to spend some time actually doing work that makes a difference, even if it's entirely uncompensated. 

I have no desire to work in a job I don't like in order to give money.  Of course, I'm not in a place where relatives need support.  I could see how that would change the equation.

AdrianC

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #3 on: September 22, 2017, 08:24:47 AM »
I included our normal level of giving in our Fire budget. Market gains of the last few years have pushed us way over our number anyway, so it's not going to be a hardship.

Understand the points about volunteering rather than cash contributions and it is important. But the places we volunteer at and contribute money to are usually ok on the former and lacking on the latter.

When we first moved to this town we visited the local homeless shelter and the director gave us a tour. I asked what we could do to help. She told us of all the volunteer opportunities and all that. Then I asked what do you really need. She said "money, we need people to give money on a consistent basis so we can budget." We committed to a regular, monthly amount. My wife still volunteers there (she's cooking and serving the dinner tonight) but it's the money that really helps.
« Last Edit: September 25, 2017, 07:07:07 AM by AdrianC »

Libertea

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #4 on: September 24, 2017, 07:45:01 AM »
To clarify, I am not advocating working in a job one dislikes after FI in order to fund charitable giving.  One of the biggest advantages of being even minimally FI is that I don't need to take the highest paying job I can find, because I do not need to save high proportions of my income toward my own retirement any more.  I also could decrease my charitable spending temporarily as needed if a personal financial emergency came up.  But like Adrian, I am realizing that some problems really are best solved by donating money.  And in order to donate money, you need to have the money to donate.  I was originally thinking that $800k would be enough of a stash to stop all paid work.  But that is only the case if I consider donating money as optional and stop doing it at my current level once I stop having a cash flow from employment (either self-employment or as an employee to someone else).  I don't want to do that.  Hence it behooves me to find a job I do like, at least until I can save up the extra $400k where I can easily fund $15k per year in charitable giving from my stash on top of what I need to fund my own lifestyle.  Like Adrian, I am thinking I want to include my normal level of giving in my retirement budget.  This does mean adding a significant extra amount to my stash that I hadn't initially given much consideration when calculating what I would need to FIRE.

Romag

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #5 on: September 24, 2017, 10:47:14 AM »
I went the Donor Advised Fund route. In my last year of working with W2 income, I opened the account using appreciated assets from my taxable investment account. So I wrote off the entire donation in my last high tax year, and paid no taxes on the appreciated assets.

I put the money into a total market fund. I've made about $5000 in donations in the last 18 months or so, and my fund value is basically the same as what it started at with market gain.

I expect the funds from the initial donation will support my giving for quite some time. I will fund it again if and when it starts to dwindle or my tax situation changes.

Very happy with the way it has worked out.

CanuckExpat

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #6 on: September 24, 2017, 09:15:26 PM »
Very similar situation to Romag, funded Donor Advised Fund with Vanguard Charitable in our second last working year. Invested aggressively, and with regular giving, we have much more invested in the fund than when we started and may increase rate of grants to charities.

If/when we work more, I will top of with some random amounts.
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FireLane

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #7 on: September 25, 2017, 06:48:14 PM »
Not retired yet, but I'm also planning on the DAF route. There are a lot of causes I care about, and it would feel unbearably selfish to stop supporting them after retirement while I spend all my money on myself.

I'm toying with the idea of working another year after I hit my RE number, solely to put the money into a donor-advised fund. Then 4% of whatever that amount is will become my annual charitable donation after retirement.

Meadow Lark

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #8 on: September 30, 2017, 06:10:54 PM »
This is a question I am thinking about.  Newly FIRED and traveling full-time.  My stache will not support giving much.  If I do end up working again in the future, a big driver of that will be wanting to give.

Cassie

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #9 on: October 01, 2017, 05:28:19 PM »
WE give small amounts regularly and do some volunteer work.  I would not go back to work f.t. in order to be able to give more.

vine

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Re: Funding Significant Charitable Giving Post-FI(semi)RE
« Reply #10 on: October 08, 2017, 03:10:18 AM »
Charitable giving is not something I budgeted for in my retirement planning - I always just assumed that it would be better if I volunteer my time instead of giving money. Two years into retirement and two things have recently made me change my thinking on this.

First of all, most of the charitable causes that I believe have the strongest impact per dollar spent are doing work in poorer countries and not usually focusing on issues at home. Sure, there are a lot of good local organizations that I could get behind in principle, but usually US focused charities accomplish so much less with their resources those doing things overseas.

Secondly, I am usually not able to helpfully volunteer locally in said countries. There is usually too much red tape involved with volunteering. And when I can volunteer I am not usually doing something particularly useful.

These organizations need money much more than they need volunteers. They are better off financially if I work a job and give cash rather than directly giving my time.

So it's probably back to work for me. At least for a while until I can either save up a large charitable giving fund, or untill I get sick of working again. I suspect since this time around work will have an external purpose it may be more tolerable, but only time will tell.