Why You Need a Budget for Charity

monk in front of children near brown concrete building

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When I was a kid, my Sunday School teacher asked if I had any questions about prayer. I asked him the most pressing question I could think of – can I pray for the Knicks? My teacher reassured me that God cared very much for the Knicks. But even if I prayed for the Knicks, there would be other children (and possibly adults) praying for the other team. So God probably couldn’t intervene in basketball games (which explains why the Knicks are so bad).

But if prayer isn’t about getting what you want, then what in the world are you talking to God for? Later in life I figured it out.

In college, I was very stressed planning a group trip to a Christian concert. (Yes, my life is quite embarrassing). And my friend said he would pray for me. Rather than pray that the details of the concert would go off without a hitch, he prayed that I would be released from worry.

It was from this prayer that I understood that prayer isn’t about getting stuff from God. Rather, prayer is about changing one’s mind. Prayer was about teaching yourself to focus on the things that mattered.

How Prayer is Like Charity

I think charity is as misunderstood a concept as prayer. People think prayer is about getting stuff for yourself. If it were about getting stuff, then you would easily get discouraged that you didn’t get what you want. Logically, prayer can’t be about the results. There are people praying “against” you – praying for their team to win, praying for the job that you want, for the winning lottery ticket. If prayer meant you could get everything you wanted, then everyone would win the lottery every day.  The reason to pray can’t be about getting stuff. Instead the meaning of prayer is to learn to change your mind to want the stuff that you get.

Likewise, charity isn’t about giving stuff to others and getting the results you want. But there are people donating to causes against yours, unfortunately. You give money to support the homeless but there is tons of money going towards other factors that are perpetuating homelessness. You can give money and then find that the charity you support isn’t using it judiciously. These can all seem like reasons to quit giving to charity. It can all seem a little hopeless but I don’t think that means you shouldn’t give to charity. Like prayer, I think charity is more about its effect on yourself, not its effect on others. That way you can’t blame external forces for why not to give to charity.

Why budget for charity?

MsZiyou raised an interesting point in my last post –  reasons why not to give to charity.

I completely agree that there are a lot of charities that are not worth supporting. There are a lot of charities that overpay their staff for very cushy jobs. Some charities seem like their missions are to support Big Charity and to make rich people feel better about themselves rather than improving heir world.  I don’t give to big institutionalized charitable organizations. I refuse even to give to my alma mater state school, which pays its dean $400k.

Just because something is called a charity, doesn’t mean it’s doing any good. Charities might not be solving problems at all, might not be solving problems in an efficient or competent way and some may actually be creating more and worse problems. Still, despite these caveats, I think charity is an integral part of one’s budget. That’s because it’s not about supporting an organization, but about devoting a portion of your budget to help people other than your self.

Where to give your money?

I don’t think limiting charity just to those organizations for which you get a tax-deduction makes sense in a budgeting standpoint or even an ethical standpoint. Charity is money spent to help others. It’s whatever is spent to direct your focus away from yourself.

So the lack of trustworthy organizations is not an excuse not to give to charity. (Sorry, so many negatives). Charity is about regularly thinking about others rather than yourself. It’s about putting our money toward changing our minds.

To me, of course the purpose of the charity matters. One should use one’s money judiciously to do the most good. There’s no point in supporting charities that do a bad job or that support a mission that doesn’t align with your values. I research all my charities and generally only support ones where I’ve volunteered and know the management.

But even if you despise all organized charity, that doesn’t mean you get to forget others in your budget. Your charity budget can include helping people you meet in need. It can be gifts to show your support for those that have helped you. You can give tips to those who are doing great in low-paying jobs.

The important part, in my opinion, is that you realize that you have more than enough in your budget than just for you. You have a responsibility to help where you can. Further, you will only learn to be happy when you learn to give. A life lived just for yourself will ultimately prove meaningless. That’s why you need a charity budget.

How the Rich Justify Donating Less to Charity than the Poor

how the rich justify donating less to charity

To be honest, as a self-described rich person, I can be a bit of a rich person apologist. But I have always been puzzled as to why the rich give less as a percentage of their wealth to charity. Some people surmise it’s because the wealthy are insulated from socioeconomic suffering or because the rich are unethical.

I had previously surmised the reason was that giving is a skill. If you don’t develop the skill when you have less, it doesn’t come naturally when you have more. So my solution was – build the habit.

How the Rich Can Justify Giving Less

A new idea popped into my head after discussing the differences between absolute and relative frugality. The rich may treat charity in terms of absolute and relative generosity.

For instance, the rich give on average 1% of their income as opposed to 3% by the poor (I don’t know if this is pre- or post-tax). So 3% at a $33,000 post-tax salary might be $1,000. 1% at a $600,000 salary would be $6,000.

The poor don’t give a lot in absolute terms to charity.  They do give a percentage that is significant for them. While the rich can give a lower percentage, they can give themselves kudos because of the amount.  $6,000 seems like/is a lot of money and the rich might stop at that amount because it’s such a large amount. Both sides can pat themselves on the back by choosing to view their donations in the way that is most beneficial to them.

In a way it makes sense. The poor can’t give much in terms of absolute amounts without doing serious damage to their finances. The rich don’t have to give a large percentage in order to make an impressive gift.

And the absolute amount certainly matters. The media have chastised Jeff Bezos  for his lack of philanthropy but he, his parents and Amazon have given away hundreds of millions.  Further, to be fair, if you have a lot of money to give, it would be wise to take your time and research before making any moves.

Are the rich terrible?

I’m not trying to shame anyone regarding their charitable giving. I applaud anyone who gives to charity in any amount (so long as it isn’t to the church of scientology etc). Decide on a charitable budget that makes you comfortable and then view your choice in whatever way that makes you feel good about it. It’s a great deed – it doesn’t have to be the greatest deed to be commendable.

Does viewing your charitable donations in terms of relative or absolute generosity help you feel better about your donations?

How to Meet Excellent People, Eat and Drink, and Support a Fantastic Cause for (Basically) Free


Last night, I got dolled up in an evening gown and heels, got my makeup professionally done, and went to a $1,000/seat gala. For dinner, I had amazingly tender short ribs, bright green beans, creamy mashed potatoes and finished it off with a deliciously rich tiramisu.

Total out of pocket cost: $5.

How did I accomplish this? I was a volunteer.

Sometime last year, I was decluttering and I thought, I have too many fancy dresses. And then I figured, ok I’m single and I don’t actually have places to wear such fancy clothes. I should get rid of them. OR I should start attending events where I can wear these dresses.

And because I love my dresses, I was set on option number two. Lucky for me though, Washington, DC is a hotbed for fundraiser galas. And not having a date is no obstacle – all galas need volunteers.

One of my 18 Resolutions for 2018 was to attend a gala. The first one came in January with a charity that I perform pro bono services for. I had so much fun meeting the other women and dancing the night away (during our dead time in between volunteer services) that I signed up for another and then another.

I have volunteered at four galas this year. At the first, we danced the night away (but spend quite awhile loading way  too many decorations into vans). At the second gala, I ran into my old boss (haven’t seen him in 10 years and he’s a great guy) and had amazing tastings from some of the best restaurants in the city. At the third gala, I was truly impressed with the honorees, and I got to explore a hotel close to my apartment, which hosts A LOT of galas. At last night’s gala, a vendor advertising their makeup services touched up our makeup. I took home a beautiful leftover bouquet of flowers including orange roses, my favorite.

Throughout the whole adventure, I’ve met a number of great ladies who love doing things by themselves. I’ve done a lot of work helping great causes and had a great doing it. Total cost – cab rides home (which may be tax-deductible).

I should mention that I did do work at these events. I stood at information booths and walk around silent auctions helping the rich and semi-powerful spend too much money on good causes. There’s a lot of work involved in volunteering but it’s typically not laborious and it’s for a good cause.

So if you are bored of another Netflix and chill night, have too many unused ball gowns and dancing shoes, consider volunteering your time to a gala near you.

What do you think of this idea?




The Personal Finance Community Should Take the Lead on Helping the Poor

I used to date a chef, and while we were dating, I couldn’t help but notice all the charity work in his field. It seems that the culinary community is active and passionate in charities that support the eradication of hunger.

So, likewise, I think the personal finance community should be active and passionate in helping charities that eradicate poverty. (I’m just throwing that out there).

But if you’re going to help a charity, particularly for an issue that has been as well-trod as poverty, you have to have a theory about what efforts are going to work. Otherwise, how are you going to know which charities to support?

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