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Money Matters: Giving away time, money can actually make you richer — here’s how

By Lillian Sanders - Special to the Daily Herald | Dec 3, 2022

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When most people think of American stereotypes, “selfless” probably isn’t the first word that comes to mind. However, contrary to popular belief, Americans aren’t necessarily the capitalistic misers that they are made out to be. Lots of Americans give significantly to charity — in fact, Americans gave $471 billion to charities in 2020, breaking the record for charitable giving despite a global pandemic. 

So, why did we do it? What is so valuable about charitable giving that many Americans continued to give and even increased their giving during one of the most financially difficult periods of the past decade?

Though this question has a variety of correct answers, perhaps the most compelling is that giving away money actually makes individuals and families richer in practically every way. Although this may seem counterintuitive, the evidence shows that charitable giving in any of its forms can enhance a person’s mood, abilities and actual income. 

If you’re finding yourself in need of a financial, personal or even professional boost, read on to learn more about the data behind charitable giving, additional financial perks of giving and ideas for how to begin making giving a part of your life.

Those who give, get

Giving away money may not seem like the best way to increase your wealth. However, more factors are at play in the mechanics of charitable giving than most people realize. Research shows that people who make charitable contributions, donate time or even give blood do better financially as a result. Even after repeated analyses of the data, they demonstrated the same thing: that charitable giving is not just a result of increased wealth but also a verifiable cause of financial increase.

As improbable as this relationship might seem, it can be explained by considering the other outcomes of charitable giving that contribute to an increase in wealth. According to the Social Capital Community Benchmark Survey, giving can make us more effective and successful in our personal and professional lives. Spending time making connections with others, learning new skills and adding value in different areas of our lives can all directly contribute to the abilities and opportunities we have to increase our earnings.

Other financial perks of giving

While charitable giving can directly impact the income you earn, simply making more money isn’t the only financial benefit of charitable giving. Giving can actually influence your finances in several different ways with significantly lasting effects. By making charitable contributions, you will set yourself, your family and others up for financial success.

One of the most obvious financial benefits to charitable giving is being able to write off the donation on your taxes. Some of the tax benefits that accompany itemizing donations on your tax return include lowering your taxable income, reducing your taxable estate and avoiding capital gains taxes. By contributing to other organizations, you will retain more of your income and enjoy seeing additional financial perks roll in.

Another financial benefit to charitable giving that’s not so obvious is that it could actually end up increasing your earning potential. When you give your money or especially your time, you are bound to form new relationships with others and make connections that could turn into new opportunities for increasing your income. For example, through my time spent volunteering at my local food bank, I made a friend who later helped me secure a job at her place of work!

What’s more, If you give to an organization, you’re more likely to have some influence on its decision-making. If the organization needs to make a decision that will end up affecting your financial situation either directly or indirectly, you can be sure that you will want to have a say in the decision-making process. 

No matter how you choose to be involved, it’s safe to say that giving pays.

Ways to give

Even if you are already involved with some kind of charitable giving, making the commitment to give consistently or give more will increase the benefits that you see from it. If you’re not in a position to make financial contributions, don’t worry: All kinds of giving can bring you wealth and well-being.

Here are some ways that you can choose to give:

  • Make a financial contribution to a good cause. Whether you’re donating to a large charitable organization, a local nonprofit or a friend’s GoFundMe, making financial contributions to a good cause is a great way to share with others (and beef up your bank account).
  • Volunteer your time. Since time is the most valuable thing we have, giving it away to a good cause certainly counts as an important charitable contribution. And, giving away your time means that you can usually count on getting something back, like new relationships or skills. Building skills builds salary, so don’t hesitate to get out there and volunteer!
  • Donate your possessions. If you’re short on time and money, then choosing to donate part of your excess may be the way to go. Whether you have extra canned goods in your pantry or healthy blood in your veins that someone else might need, sharing the physical things that you have is an important part of charitable giving that can quickly fill an immediate want.

If you’re looking to build wealth, charitable giving should be a high-priority item on your list of investments. Although it may seem backward, the data behind charitable giving confirm that making charity a regular part of your life will leave you better off. As you begin implementing volunteering or making donations into your budget and schedule, you won’t have to wait long to enjoy the financial perks of charitable giving.

Lillian Sanders is a project manager at Stage Marketing, a full-service content marketing agency based in Provo.