Counting the Cost of Generosity

Perhaps you’ve heard that Warren Buffet calculates the cost of purchases in terms of what that money could yield in the stock market over many years. It’s a different way of thinking that can turn that daily lunch out into a $150,000 proposition. Last we looked at the art of the alternative—the idea that we can often find similar, less expensive options that allow us to have our financial cake and eat it, too.

But this week, let’s count the cost of a different type of spending: giving away money. Most people agree it’s good to be generous. People have widely different approaches to how, where, and what amount to give. But one thing we all ought to do is count the cost of our generosity.

For example, if you give away 10% of your income, how does that deflate your lifestyle? What kind of car could you be driving? What kind of upgrade could you have in your home, what you eat, or your vacation plans?

What might your investments look like after 30 years of an extra 10% monthly contribution? How might your net worth change if channeled that “extra” money into debt payoff? How different might your kids’ college funds looks?

This exercise isn’t meant to be self-congratulatory. Instead, it’s a great way to give wholeheartedly, with eyes and “pocketbooks” wide open. It’s valuable to fully understand what the trade-off is and deem it completely worthwhile to give instead of keeping it all for yourself. Without counting the cost, it’s easy to give rotely, perhaps because it’s the “right” thing to do–which is good, but might fall short of giving cheerfully and enthusiastically.

We’ve counted the cost of our generosity. We know what our giving means in terms of net worth growth or what kind of car we could drive. And our conclusion isn’t to give ourselves a pat on the back, but to affirm what a good investment we are making through giving. It’s a way of resolutely calculating that the potential lifestyle or net worth inflation is garbage compared with sharing what God has given us.

I encourage you to count the cost of your generosity. Perhaps you’ll even find yourself wanting to give more as you face the alternative destinations for your money and realize they pale in comparison. I share this because it hasn’t made us feel deprived, greedy, or self-righteous, but only more determined, excited, and blessed.

The Cost of Keeping

While you’re already calculating, why not consider the cost of keeping it all for yourself? Sure, you’d save more, invest more, or live larger. But what would you miss out on?

You won’t get to inflate the lifestyle of those who actually need it.

You won’t get to increase your real worth.

You’d miss out on the well-documented psychological benefits that come from giving, particularly those who give at least 10% of their income.

You’ll never see the surprising ripple effect a gift can set in motion.

You won’t get to partner with organizations and causes you care about.

You’ll miss out on an important and much-needed way to be an agent of change in the world.

You won’t get to experience the joy of entrusting your resources back to their Source.

You’ll likely leave the most important factor in your finances—your heart—untouched.

You won’t learn the financial discipline that consistent generosity can teach.

You leave your heart vulnerable to greed.

You could reinforce entitlement in yourself and your children.

Counting the cost of giving vs. keeping is a powerful way to make informed decisions about your money. Maybe the exercise will even motivate more generosity. We won’t know the full impact of our gifts in this life, but we can be confident that when we give wisely, both the giver and receiver will benefit:

Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.” (Luke 6:38)

What do you think of counting the cost of generosity? What other benefits might we miss out on if we don’t practice generousity?

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14 Responses to “Counting the Cost of Generosity”

  1. Tonya says :

    hmm good question. It’s weird because I do give some of my money away, but I don’t think it makes me feel much different. Where I do feel different is if I do something hands on. Or donate my time. Or just do something random and nice for someone, which may or may not involve spending money.

    • Kalie says :

      Well, I’d say the ultimate purpose of giving money away isn’t feeling a certain way, although that sometimes comes. But I know what you mean that sometimes that direct, interpersonal contact might bring feelings of joy more easily than signing over some money to a seemingly far-off organization.

    • Kalie says :

      Well, I’d say the ultimate purpose of giving money away isn’t feeling a certain way, although that sometimes comes. But I know what you mean that sometimes that direct, interpersonal contact might bring feelings of joy more easily than signing over some money to a seemingly far-off organization.

  2. Brian says :

    I find that helping someone directly, by volunteering or donating my time has the biggest impact for myself and others. I also like random acts of kindness, there is something to the unexpected nature of the giving that sparks feeling for both the giver and receiver.

    • Kalie says :

      It’s hard to say what has the biggest impact on others. I believe the child sponsorship we’ve done for children we might never meet has completely changed their lives more dramatically than our years of consistent volunteering with people we can interact with face-to-face. Every situation, organization, and type of giving or volunteering has unique qualities. And yes, the unexpected aspect of “random” giving probably produces more emotion on both sides than giving away money quietly and consistently year after year.

  3. Bethany says :

    Agree wholeheartedly with this post. We’ve come to the point where we just don’t need or want any more “stuff” purchased with money. Even after funding retirement accounts and spending a lot on travel, eating out, etc., there is still a LOT left over and right now our alternative to giving is putting the extra into the stock market. We don’t think that will give as good a return (especially after taxes) as investing into individuals and different ministries (who are investing into individuals).

    • Kalie says :

      What a great way to put it–that generosity can sometimes produce a better return than further investing.

  4. DC YAM says :

    Wow loved how you flipped the argument on its head. Too often we don’t think about what we lose out on when we aren’t generous.

    • Kalie says :

      Yes, generosity is not all about what we can gain, but there is much gained for both parties when we are willing to share what we have.

  5. Fruclassity (Ruth) says :

    Why do so many of your posts make me weepy? Profound stuff here. Further to what you say, I have heard many testimonies from people who give in faith and then end up receiving what they thought they had sacrificed in order to give.

    • Kalie says :

      Thanks, Ruth. I have also heard many stories, and even experienced some instances myself, of people giving faithfully and then receiving unexpected gifts. Of course giving can’t be contingent on that, but it’s beautiful when it happens, and seems to happen more than I’d think.

  6. Revanche (A Gai Shan Life) says :

    Earning more, and keeping it rather than spending it, is always my top priority, but right alongside it, the co-top priority is to do good with that money. We can’t ever forget that as hard as we have worked for our livelihoods, we have always benefited from someone’s generosity, even if we didn’t know when or who, and it’s our responsibility to give back to help others as much as it is our responsibility to make intelligent decisions on saving or spending the money we keep.

    It’s so important that we acknowledge how privileged we are to make the choice and it keeps us more human to do so.

    • Kalie says :

      Thanks for sharing these valuable points, Revanche. I agree that we have received advantages and benefited from the help and generosity of others, sometimes in ways we probably don’t even realize. And we are in a privileged position to have something to share. It can also be easy to view generosity as something only the very wealthy can afford to do, but I believe many people can find room to share something, even if it doesn’t look as glamorous as some wealthy philanthropists.

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