Christmas has me thinking about a man who pretended to be poor. He left the wealthiest kingdom of all time to become a simple tradesman. He left the most powerful social status to become a peasant. He left glory to be scapegoated, and left honor to be humiliated. He released the use of divine power to take the form of a helpless human infant.
You know the generous grace of our Lord Jesus Christ. Though he was rich, yet for your sakes he became poor, so that by his poverty he could make you rich. (2 Corinthians 8:9)
He became poor so we might become rich. This phrase has haunted me this holiday season. What does it mean? The love, joy, and peace that comes from knowing Jesus cannot be surpassed by the best investment portfolio, the nicest house, or the most successful career. We owe our family, friends, health, talents, material provision, and so much more to the Giver of all good gifts. We truly have been made rich in every way by the One who pretended to be poor for our sake. He paid the debt we owed Him, that we could never repay no matter how hard we tried. He paid it at great personal expense–becoming poor, and giving His life.
“He will make you rich in every way so that you can always give freely. And your giving through us will cause many to give thanks to God.” (2 Corinthians 9:11)
We are far from perfect at giving freely. But we will continually the beat the drum of generosity here and in our own lives because we’re forever astonished by the sacrifice Jesus made for us.
In conjunction with today’s post, please check out my recent Society of Grownups article “Choosing a Charity: A Hands-on Approach.” I wrote it because I know it’s overwhelming to trust someone else to manage your money well, and there are an overwhelming number of options. So I describe a step-by-step process for selecting a trustworthy nonprofit to donate to. Now to today’s topic…
”I prefer to give time instead of money.”
“There are so many corrupt charities—I don’t want to line the pockets of some rich con artist.”
“Giving doesn’t have to be financial. You can give time, possessions, or simply kindness.”
“I like to give when I feel there is an urgent need.”
“I love to give really generous tips to servers.”
I hear these sentiments about charitable giving all the time, and each one conveys a piece of the complicated puzzle that is generosity. Yet each could also represent a misconception about philanthropy.
Last month I shared my belief that the purpose of money is to provide for needs and wants, for myself and others, now and in the future. We dissected wants. Vs. needs, and probably ended up more confused, though grateful, than we started.
This week let’s look at the next part, “for myself and others.” We’ll explore different types of giving, and I’ll make the case for one approach you can’t afford to skip.
There’s More Than One Way to Give a Dollar
Sometimes people conflate the idea of generosity with being a nice person in general. Volunteering at your kids’ school or helping old ladies cross the street could be called generosity under this definition. I find it a bit odd that on personal finance blogs, we’d suddenly jump topics and start talking about random acts of kindness. By all means, help the old ladies, but let’s stick to the theme: money. (Things that you buy and then donate count, too). Here’s a list of ways one might give away the green stuff:
|Others Wants & Needs|
|Gifts for friends and family|
|Giving to a faith-based group|
|Giving to charitable causes and non-profits|
|Random acts of generosity to individuals|
|College funding for your children (?)|
I see two main categories:
- Personal gifts
- Charitable gifts
Both are valuable and important. And there can be overlap between these categories. But we’re not going to count our familial Christmas shopping as philanthropy. I love giving and receiving thoughtful gifts, but personal gifts—even very generous ones–can’t and shouldn’t replace charitable giving in your financial plans. Giving to those outside your own tribe cultivates compassion in a way that guards against greed and grows your real worth all at once.
Under charitable giving, there are two main approaches:
- Spontaneous gifts
- Planned gifts
Many people practice spontaneous giving. Perhaps it’s the Boy Scouts selling popcorn, the Salvation Army Santa outside the grocery store at Christmas, or the community food drive. Then there are the urgent calls for disaster relief or refugee care. Being able to respond to needs in the moment is incredibly important. These are times when compassionate, spontaneous giving is invaluable.
The Case for Planned, Consistent Giving
If we rely on spontaneous giving alone, we will not give as generously as if we plan ahead. Yes, it’s more work up front. Yes, it will require more money. But it also allows for a long-term partnership where you know your money is actively and effectively helping others on a regular basis. We plan ahead for ourselves with emergency funds and retirement accounts. It only makes sense to plan ahead to help others, as well.
There’s a reason many of the world’s faiths call upon followers to give away a portion of their income, such as ten percent. I don’t believe 10% is a magical number or even required by my faith, but it’s a good starting point. Choosing a percentage is helpful because it’s easy to feel like I’m doing so much good because I’m giving away $50 a month! That’s a great starting point, but if you’re making a median $51,900 per year, you’re giving away a whopping 1%.
It’s also easy to give less (percentage wise) as your income increases by simply giving the same amount you always have. The average individual American charitable giving by percent is lower for those with higher incomes.
Whatever percent or amount you choose, please choose ahead of time! We read all the time about why we should save a certain percent, invest a certain percent, don’t let housing costs exceed a certain percent, etc. Plan your giving like you plan your saving, investing, and spending. If you believe sharing is part of what money is for, grant giving the forethought and importance it deserves by choosing what to give ahead of time.
We choose the causes we want to give to, then the amounts we want to give. Next we add ’em up and see how that compares against our income, i.e. the percentage. Then we can adjust the amounts and/or causes as we see fit. Finally, we sign up to have these auto-drafted from our checking account monthly, just as we do with most of our expenses and investing. Giving to urgent needs is determined as they arise.
All types of giving are valuable, but planned, consistent giving is the key to unleashing more funds toward improving our world. I believe many people would be moved to greater generosity if they thought of giving as a strategic financial commitment. If it’s truly better to give than to receive, let’s plan to make giving happen.
For more on charitable giving, check out:
What type(s) of generosity do you practice? Has anyone found they give more when they commit ahead of time?
Back in college I always joked about how I couldn’t wait to be a “real person.” You know, someone with a degree, a job, and even a family. I’ve “arrived” at my youthful definition of adulthood and found there’s much more to it than I once thought. It’s impossible to capture the essence of maturity in one blog post, but here are some steps that have been part of my journey.
1. Make a financial spreadsheet. I’ve always been a saver and planner, but for years the numbers were just swirling in my head, or floating around on bits of scrap paper. Then my husband Neil, an engineer and Excel-lover, made an epic spreadsheet that’s tracked and motivated our financial goals for years.
The spreadsheet helped us visualize the progress of short-term goals like saving for a down payment or a baby . It’s also how we budget and track our net worth, retirement accounts,credit card rewards, and more.
Not sure where to start? Plug your numbers into our 9-page sample spreadsheet. (The numbers are fake, the formulas are real.)
2. Give money. It’s all too easy to put off charitable giving until we feel more financially secure. Regular giving will never feel easy, as we’re all prone to increasing our expenses along with our income. If you give a little when you have a little, you’ll be more likely to give more when you have more.
3. Volunteer overseas. We each traveled separately on an international mission trip and found it very worthwhile. We are so grateful for the opportunity, as it truly changed our perspective and deepened our sense of purpose. Of course, you don’t have to cross borders to help out. The step outside my comfort zone wasn’t quite as large during domestic service trips, but they were still profound experiences.
4. Pay off debt. Many people our age are still nursing student loans, while adding credit card debt, car loans, and mortgages. While we can’t control the cost of college or the borrowing choices we made as teenagers, we can move forward by taking debt payoff seriously.
Debt is a major source of financial stress, so why add more of it to your life? Get your numbers into our sample budget spreadsheet and explore the possibilities—could you cut from areas like entertainment, travel, or clothing to get out of debt faster? Is there are any way to the lower the top three expenses of housing, transportation, or food?
5. Max out retirement accounts. In your 20s and 30s, retirement feels far away, almost mythical. Perhaps that’s why 40% of millennials don’t have a plan for retirement. Yet it’s so important to temper enjoying the present with planning for the future.
Even before your debt is completely out of the way, it makes great sense to start investing because an early start allows compound interest to work its mathematical magic. We struck a balance of investing 15% of our income while aggressively paying down student debt. After that we increased our rate of investing.
6. Have kids. Raising children is so hard at times, but it’s softened my heart unimaginably. And while most sources say kids cost a pretty penny over the long run, having them also motivated us to get our financial act together more than ever. Read about How Having Kids Has Improved Our Finances.
7. Make time for friends. Often as people marry and have children, friendships fall into the background. As a mom of little ones, I completely understand the draw to hunker down and just try to survive! But there is no time that you need your friends more than as you enter the new roles of spouse and parent. While we don’t go out with friends as much as we did before babies, we continue to see them at church, invite people over for dinner or coffee, and plan fun little outings with other families.
8. Dream big. I can be pragmatic to a fault. Case in point: when a curly-haired cutie asked me out to lunch on the second day of college, I answered dryly, “I already ate.” (We’ve been married ten years now.)
If I just slog through the details of daily life without a bigger purpose in mind, I’m at risk of only doing what others expect of me. And that’s very dangerous for both my finances and my soul. Dreaming big helps you clarify your motivation for any grownup action items. We’re much more likely to follow through on steps that fit into a bigger picture.
We also find ways to incorporate elements of our dreams into life today. That’s why we’re Rocking the Burbstead!
Sometimes I can’t believe the college girl who turned down a lunch date is now a “real person” with a family, an IRA, and a financial spreadsheet. None of those inherently comprise adulthood, but they’ve been part of my journey. What about yours?
What’s on your grownup checklist? What is your next action step toward a bigger goal?
Did you know almost half the world’s population lives on less than $2.50/day?
A huge portion of the world lives in abject poverty. For example, recent droughts in India have increased prostitution, child labor, and the incidence of child brides because people simply don’t have enough resources to provide for their children. Many Dalits “don’t exist” on paper and thus do not have reliable access to government assistance.
Did you know that for $1/day, you can change the life of a child in poverty? For many people in developed nations, $1/day is an amount you’d barely even miss. That can’t even buy you a coffee. It’s about one Chipotle burrito per week. Whatever $1 means in your budget, if you can spare it, I encourage you to consider adding a real worth investment to your portfolio.
Why not inflate someone else’s lifestyle instead of your own? After all, $1 per day can’t inflate your lifestyle noticeably. Investing $1 per day isn’t going significantly alter your retirement plans. But it could radically alter the trajectory of someone else’s life, while also inflating your usefulness.
It could be the difference between infanticide and life. Between starvation and nutrition. Between ignorance and education. Between being sold as a child bride or prostitute, and having a wholesome childhood. Between a family being broken up or staying whole. Between untapped potential and opportunity.
There are so many great charitable causes out there, but child sponsorship is something near to my heart because children are often innocent victims of forces much greater than themselves. They have not chosen their way into bad circumstances. They are completely powerless to improve their situation.
Yes, some organizations take donations that do not actually benefit the children they claim to help. Corruption and fraud exist and that means donors have to exercise caution. That’s why we started our research with personal recommendations from friends who have visited the organizations we donate to, and eventually visited one of our sponsored children.
Let’s cover some common questions and concerns.
Does this conflict with parents from providing for their children?
The organizations we give to practice holistic efforts to help entire communities. Therefore, the parents often have access to vocational training, education, employment opportunities, and micro loans. While we can’t vouch for every possible scenario, the efforts of the organizations we’ve chosen to support include helping parents as well.
Also, many children who benefit from sponsorship are orphans. And since the quality and reach of orphan care varies quite a bit across countries, we are happy to help “orphans and widows” which James 1:27 describes as “true religion.”
How do you know the money is going to benefit the children?
During our international mission trips, Neil and I separately witnessed the huge gulf between sponsored children and street kids. Our sponsored children live in very simple but safe homes. They attend school rather than begging or trying to sell things on the street. They receive sufficient food and clothing, as well as an education. They often receive help with career training, higher education, and even marriage if they do not have a family to help with this.
We personally met the “house parents,” school teachers, program directors, and even the president of one organization we sponsor a child through. I also was able to meet our child’s mother, who spent almost our whole time together saying “very thank you.” It was incredibly humbling; you can read more about it here.
There are many good organizations that do child sponsorship and poverty relief, but I can’t vouch for them personally as I can for India Gospel League. I’ve personally seen the work of IGL and find the organization to be highly efficient, effective, and holistic. Friends of mine visited Compassion International’s work in one country (Ethiopia) and found their ministry to be worth supporting. I’ve also heard great things about World Relief.
Would you consider inflating someone else’s lifestyle through child sponsorship? This cause hits even closer to home now that I have children of my own. I can’t imagine being in a position where I couldn’t provide for them; it’s too heart-breaking to even think about. Yet many parents across the world find themselves in this situation, often due to forces outside their control.
Please don’t let fear of corruption hold you back from helping the needy. Do a little research. Check out a charity rating website like Charity Navigator. Ask friends if they could recommend an organization, or even volunteer with or visit a group to learn more. If you prefer to help domestically, go for it! Or if you want to help adults, consider supporting a microloan program, vocational education, or refugee needs.
Inflating some else’s lifestyle is a real worth investment that will have a solid return, and it’s very rewarding to know you can change someone’s life, even if you may never meet the person. It truly is “more blessed to give than to receive” (Acts 20:35).
Any questions or recommendations? Have you ever sponsored a child or microloan?