The Antidote for Greed

At a recent conference in Las Vegas, I participated in a panel discussion called “Libertarian Millionaires: How to Make It, How to Spend It, How to Give It Away.”

I talk about making it, spending it and investing it all the time. Here are a few of the thoughts I shared on giving it away.

The English architect John Foster once remarked that the loudest laugh in hell is reserved for the man who dies rich. (Presumably because the decedent had neither the enjoyment of spending it nor the pleasure of giving it away.)

We all know that shrouds don’t have pockets and hearses don’t have luggage racks. But that doesn’t mean that giving your money away isn’t a challenge.

Most of us struggle to earn enough, spend within limits, and save and invest for the future. Unless we plan, charitable giving can get short shrift.

We want to give intelligently, of course. So we grapple with who should get it, when we should give it and how much we should give.

These are deeply personal questions. And I’m no more certain of the answers than the next guy. Fortunately, we have a couple millennia of wise commentary to guide us.

According to the medieval philosopher Moses Maimonides, for instance, there are eight grades of charity:

1. To give reluctantly
2. To give cheerfully but not adequately
3. To give cheerfully and adequately, but only after being asked
4. To give cheerfully, adequately and of your own free will, but to put it in the recipient’s hand in such a way as to make him feel lesser
5. To let the recipient know who the donor is but not the reverse
6. To know who is receiving your charity but to remain anonymous to him
7. To have neither the donor nor the recipient be aware of the other’s identity
8. To dispense with charity altogether by enabling your fellow man to have the wherewithal to earn his own living.

This ladder provides a pretty good gauge of our charitable disposition. If we want to move up, we need only ask how to get started and when.

The answer to the second question is easy. Now. It’s a mistake – albeit a comforting one – to imagine we’ll start giving once we reach a certain income level or net worth.

Like studying, meditating or exercising, giving only becomes ingrained when we engage in it regularly. If you aren’t charitably disposed now, becoming rich isn’t likely to make you so. That’s why it’s imperative to give along the way.

Most of us already do. According to the Giving USA Foundation, the leading researcher on philanthropy, two-thirds of U.S. households with incomes of less than $100,000 give to charity.

Americans donated an estimated $373.25 billion last year, the second consecutive all-time record. The U.S. is the most charitable nation in the world. And not just in terms of the gross amount given…

According to a recent study by the Charities Aid Foundation, Americans give twice as much (2% of GDP) as the next most charitable nation, the U.K. In fact, Americans give more as a percent of GDP than France, Germany, Turkey, Singapore, New Zealand and the Netherlands combined.

How much should you give personally? Some say 3% of after-tax income is a good goal. Tithers strive for 10%. The well-to-do often give much more.

Mary Hunt, the creator and editor of the website Debt-Proof Living, says her family continued to give 10% of their after-tax income to charity even while digging out from more than $100,000 in credit card and other unsecured debt.

Some financial planners would argue that it’s foolish to contribute to charity while paying exorbitant interest rates to creditors. Hunt disagrees. She says she could have paid the debt down faster – it took 13 years – but is convinced the donations helped provide the discipline to make her debt free.

She believes in regular, systematic giving, calling it “the antidote for greed.”

There are other benefits of charitable giving. You’ll receive a tax deduction. It may help you better manage the rest of your finances. And, if your giving is sizable, you may even receive public recognition

All fine. But almost certainly, you will also better appreciate the blessings in your own life.

Giving doesn’t require money, incidentally. As Maimonides reminds us in level eight, we can do more than just share our riches with another.

Time spent helping others do more for themselves can be the highest form of charity. Give a man a fish, and he’ll eat for a day. Teach a man to fish… and he’ll sit in a boat and drink beer all day. (Sorry, but you already knew the original chestnut.)

Money is the way most organizations get things done. But dollars and cents are only one kind of gift.

Those of lesser means can always give a portion of themselves, whether through a thoughtful act, a timely suggestion, a helpful idea or a word of appreciation.

As John D. Rockefeller Jr. observed, “Giving is the secret of a healthy life. Not necessarily money, but whatever a man has of encouragement, sympathy and understanding.”

In the end, our worth is determined not by the fine sentiments we feel but by the good works we do.

And while we may not always have happiness ourselves, it is always possible to give it.

Carpe Diem,

Alex