Are you giving away money?

[wlthrtwll]

Do you give away your money?

For years I listened to Dave Ramsey Radio show about getting out of debt and he often said our ultimate goal should be to make a lot of money so we can give it away to help others. Otherwise, money has limited value. A viewpoint I don't often hear from financial advisors.

Recently I acquired an unexpected large inheritance, and took Dave's advice and gave it to a family who helped take care of me when my mom became mentally incompetent, and we were kicked out of our rental (nonpayment).  That family was (and still are) very poor, have many children of their own, but they had much more generosity then, than I do now in FI.  Finally glad I saw the obvious.

It's hard to get financial advice or family support to give away money (other than donations for tax deductions). There seems to be an unspoken opinion that you shouldn't give money to poor people because they don't know how to spend it.

Do you have your own story we can all learn from?

[AuspiciousEight]

I have given a lot of money away to poor people during my life.

Some of it was used for drugs and gambling, some of it was used as a down payment on vehicles that were then repossessed because they could not afford the payment because they spent their money on vacations and fast food instead.

Eventually I gave a poor person a car instead of money and the car was used to go and get drugs and commit low level crimes (theft, grand theft).

One of the people (my cousin) spent the money other people gave him on drugs and then overdosed and died. Thankfully that wasn't me who gave him money, but rather my other cousin....

Be careful when giving money to poor people. Some people are poor due to life circumstances and not due to their own poor choices. These sorts of people will probably put money to good use.

Other people are poor due to perpetually making irrational, unhealthy, immoral and sometimes criminal life choices.

The latter group of people probably should not be given free money as it may actually do more harm than good.

[reeshau]

I mostly give money to charities.  I haven't itemized since we closed our mortgage, so it's not for a tax deduction.

Outside of family, there is one particular instance we significantly supported someone else.  It was a high-drama family, with 3 kids, in another state.  Very loving, but very out of the ordinary. (2 of the 3 kids were LGBTQ, and when we met them, they lived in a small town.  One was suicidal for the experience)  We came to find out, some years after we got to know them, that the father had a run-in with the law.  He protested his innocence, and I believe to this day is was innocent,  but he didn't handle the initial arrest particularly well, so the local prosecutor, who had political ambitions, seemed to want to make an example of him. (He was not violent--would never hurt a fly.  But he was so disoriented that he did not unambiguously protest his innocence.)

We went up to visit them for a while, and watch their kids while they dealt with legal issues.  They had nothing, so were relying on the Public Defender's office for representation.  After seeing their family, still loving and caring through this high point of drama, I did a little research.  See, the father's custody of the kids was at stake.  And the win rate for the public defender's office was 60%.  That night, I literally couldn't sleep thinking that he (or they) could lose contact with their kids on not much better than a coin toss.  That, knowing that the prosecutor was going all out--bending rules to the point of breaking.

I just couldn't stand it.  So, the next day I asked DW, and we told them we would pay for the defense.  Let the facts be what they may,  but they deserved a fair shake.  They picked a lawyer they were comfortable with, and although I also vetted them, I had no further input to the case; just paid the invoices.

Long story short, the ambitious prosecutor lost. (though never disciplined, I think)  Kids are now in their 20's and happily as weird as ever, talking about their future lives.

About the most direct impact I've ever had in a non-relative's life that I can think of.

[iris lily]

Yes, this year my goal is $30,000.

Last year it was $20,000.

The year before it was $20,000.

I am now just passed the age of 70.5 where I can take money out of my IRA and have it sent directly to a qualified charity. Before I hit that age, I was taking it out of a Roth but it’s not smart to take it out of a Roth.

I don’t have any good story, except perhaps I worry that I’m gonna drop dead and all of our money will end up sitting in DH’s hoard until he dies, and then it will be distributed, too much of it to his relative and mine,. To be fair, we have a trust and have named many beneficiaries, including several charitable organizations, but… I like giving little amounts to smaller organizations that are not in my will.

 DH holds the brakes on how much we donate. Of course I have my own IRA, but I insist that we use some joint funds and I insist that he donate as well out of his IRA.

When DH and I reach the age of Required Minimum Distribution  will have to talk about how much that is and where that money is gonna go, but I doubt that we’ll need it for ourselves.

[hooplady]

Yep, I donate large amounts to charity each year and smaller amounts to individuals who I know personally, who I know will use the funds as intended. In the past when I gave to individuals it didn't always go well, so I have only a few who get that now.

[englishteacheralex]

Giving/generosity is an important value to us. Here are a few things we keep in mind:

1. We aim to give a percentage of our income rather than a number. We've been married 12 years, and our giving percentage has pretty consistently been ~14% of our gross income.

2. We don't really give money personally to individuals except in rare circumstances. My husband is a social worker who has worked with homeless people in various capacities over the years, and he really prefers giving to established organizations that work to help people access services to improve their situations, not just one-off handouts.

The financial circumstances of both of our families of origin are pretty elevated compared to our own, so we're not in a position where people ask us personally for money very often.

3. We try to give money to organizations that we also volunteer with, because it makes the giving more hands on and real to us.

One of our favorite organizations is Family Promise, which is a national organization that provides services to homeless families. I bring it up because it has a lot of ways to volunteer and I think it's a solid place to start if you're interested in helping the homeless.

There is a local food pantry that I also really love to volunteer for and to donate money to, and I've recently gotten involved with a non-profit organization that cleans and removes invasive species from various sites around Oahu, where we live. Those are locally based, so not relevant unless you live here, but I have a feeling similar organizations exist nationwide and I've really enjoyed getting involved with both of these.

I think if you're looking for meaning and fulfillment for your money and time, you can't do much better than finding a worthy cause to donate to. And I think if at all possible it's a good idea to start before retirement. Why wait? Exercise those generosity muscles sooner rather than later!

[Turtle]

I’m not doing any major giving of money until 70.5, when I’ll be looking to do good and keep RMD/IRMAA levels at least somewhat under control.

However, my company does donation matching up to a limit, so I’m giving that much this year and next year before I retire.

[Sailor Sam]

I’m not post-FIRE yet, but yes, I give away oodles of money. I have two charities that I donate to, I’m saving fund a big cash gift to each nephling at 21, and I’m part of a mutual aid thingum.

I don’t have much of a story, beyond deciding in my early adulthood that generosity is important to my own moral code. I’ve been donating at least 10% of my income for about 18 years, which is upwards of $150,000 based on some very back of the napkin guestimation. I still reached FI in excellent time.

[FireLane]

I have a donor-advised fund that I got up to six figures before I quit my job. I give to charity from that fund each year, treating it as a separate pool of money for purposes of the 4% rule. I also make out-of-pocket contributions to progressive political candidates and other good but non-tax-exempt causes.

I rarely give money to individuals, except in special circumstances. I'd rather give to a reputable charity where I have some assurance of how it's going to be used.

[MaybeBabyMustache]

We give regularly to charities, and with me going back to work & earning more than I expected, we have more plans to do the following:
-Help pay for my nephew's college. He's working hard & we'd love to help him graduate without loans, if possible.
-Treat my parents to a few vacations they couldn't otherwise afford. They are 75 & 72, so it's now or never. They are incredible grandparents & parents.
-Treat my sister to joining me on a few trips as well.
-Provide additional financial support to special needs aunt as she ages
-Increase charitable contributions to organizations

[less4success]

I have only donated roughly 4% of my lifetime earnings. After FIREing, I find it difficult to give away money that I might need. I’m hoping this is mostly due to major life changes over the past few years and concern about sequence of returns. Hopefully those worries will fade.

I like to think if I went back to work I would donate at least 25% of my income, but while not working I’m not as generous with money as I imagined.

[Greystache]

My wife and I had been comfortably FIREd for about 8 years when her mother died and left us $125K. It was a nice chunk of money but we didn't really need it. We decided to give it to our kids who were getting married, buying their first homes, and starting families. It seems much more sensible to give it to them now instead of passing it on as an inheritance when we died. So every Christmas, we give our kids a check for $10K and will continue to do so until the money is gone. We also use some of it to start savings accounts for the grandkids as they come along.

[Turtle]

I have only donated roughly 4% of my lifetime earnings. After FIREing, I find it difficult to give away money that I might need. I’m hoping this is mostly due to major life changes over the past few years and concern about sequence of returns. Hopefully those worries will fade.

I like to think if I went back to work I would donate at least 25% of my income, but while not working I’m not as generous with money as I imagined.

Worry about SORR is a large factor in my waiting until 70.5. Gifts at that point will be scaled in line with how generous the markets are in the interim.  (Sizable traditional retirement accounts)

[seattlecyclone]

Yeah I've been giving away money ever since I first started a corporate job with a matching gift policy. I maxed that thing out every year. Now that I'm FI but still working, a big chunk of my paycheck goes to charity. Quicken tells me our lifetime charitable giving adds up to more than my current annual salary, and that doesn't even count the current balance of our DAF that will be used for some future gifts.