My total charitable contributions for 2006 amounted to $0. My 2007 contribution is a $25 donation to my school. Granted, I am still in college. But I have the ability to give more, especially because all my basic living costs are covered and I could forgo a meal of $20 sushi in exchange for writing a check to a charity. For some reason (conscious or unconscious), I have chosen not to donate as much as I could.
I thought about this topic when I stumbled on this post by Miserly Bastard. Although MB doesn’t reveal his exact finances, I’d venture to say that he is one of the wealthiest pf bloggers around. Given that he is an attorney and that his wife works at a hedge fund/private equity shop in NYC, their household income probably hits the seven figures. MB reveals that he only made a $125 cash donations to charity in 2006.
Why give? I decided to read on what charitable-to-charities bloggers have to say about the issue.
1. Free Money Finance regularly writes on tithing and donates his blog’s revenue to charities. According to FMF, giving will help you get out of debt. FMF says his experience “in coaching people in their finances for 15 years or so. It seems like the givers are always better off, able to get back on track easier, etc.”
2. English Major aims to donate 5% of her income to charitable organizations. She wants to make sure that her financial decisions reflects her principles.
3. Millionaire Artist continues to donate even though her income has been reduced. She writes giving forces her to appreciate what she does have.
4. TiredButHappy’s giving plan details an annual donation of $1,500, to the political organizations that she supports.
How does this relate to MB and his contributions? Hopefully I have not misunderstood the above four posters (my apologies if I do), but it seems to me that their charity comes from the fact that they derive utility in giving. In other words, people who contribute to charity derives more gratification and happiness by giving money away. For example, I contributed $25 to my school because donating that $25 makes me happier than if that money was sitting in the bank or if I bought a new wallet with it. (I hope readers don’t think I am trivializing people who give by saying that they derive utility from giving.)
According to MB, he never found charitable giving to be particularly psychically gratifying, although he is not averse to giving. Now, what incentives would there be for MB to give? Even though he doesn’t seem to be much of a giver, MB obviously has been successful at managing his finances – he is VERY well-off by almost any standards. He is a husband and a father who care about his family’s welfare (just look at this post on emergency preparation!). Like English Major, MB’s giving DOES reflect his principles (but their principles differ) – he donated to Hurricane Katrina because of patriotism, and did not donate to the Asian tsunami crisis because he decided that he owed no moral duty to help non-Americans.
Like TiredButHappy, MB contributes cash to political organizations that he supports. In his case, he gives to the NRA every year, but that donation is not tax deductible. Still, one could argue it is no less a charitable giving than a donation to the Sierra Club.
So, why would people who derive no utility from giving still give? If giving DOESN’T make you feel better, if you feel NO sense of obligation to people outside your family or community, if you are financially successful and appreciative of what you have WITHOUT giving, if you don’t have a religious reason for being charitable, why would you give? How would someone convince you to give? SHOULD you give?
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