Thursday, December 16, 2010

Why To Give, No Matter The Benefit

I know as an estates lawyer in Houston, when we set up GRAT's (a Grantor Retained Annuity Trust), or other mechanisms for clients to deliver their philanthropy, there is much discussion about the benefits of the gift.

But what about for the giver?

This does not quite work, when the giver is an estate--but since I am not writing to a bunch of estates (I am writing to real people!), I will proceed with some strong words about WHY you should be giving, no matter how effectively your money is spent by the charity!

1. Tax Rate Leapfrogging.
You can bump yourself into a whole different (lower) tax rate, at times, by reducing your taxable income. This is something to consult with your CPA about, if you wonder if you are on the fence.  (If you need a recommendation for a qualified local tax pro, just let me know in the comment section below.)

2. Your heart changes.
Studies show (http://www.livescience.com/health/080320-happiness-money.html) that when individuals spend money on gifts for friends or charitable organizations, their happiness increases -- while those who spend on themselves get no such boost. Even Scrooge can agree that everyone wins.

3. You can double your money without doing any work.
Instead of simply sending off your money, why not find out if anyone is offering to match? Sites like www.DonationDoubler.org have lists of companies that will match your charitable contribution. Find one you like and suddenly you contribution goes twice as far!

4. You're just going to blow it on something dumb anyway.
As pious as you are, there is still extra money in your budget somewhere. Create a budget for charity donations, then take some of your extra money (each month or each year) and donate it to charity. Use your spending money to make a difference instead of spending it on Brookstone junk you'll use once. And if you think you do not have enough, take that extra 2% you'll be earning next year and put that toward a charity fund. For someone making $30,000, that is about $500!

5. Face it: If you don't help now, you never will.
Don't pretend that instead of giving money, you are going to donate time. When was the last time you volunteered at a soup kitchen? Don't let your mind fall for this trick. Send the money now or you will end up giving nothing.

6. Be a leader, not a follower.
This is the biggie, in my opinion. There is just something that happens in your psyche when you cut a big (or relatively big) check to someone in need, or to a charity organization. You feel more powerful--more dynamic. You signal to your own unconscious: "Money does not rule me. I have more than enough, so much more than enough that I am giving it away." Then, of course, something special often happens: more money seems to find itself in your hands.

I am not advocating a mystical pay-it-forward scheme; I am simply making the observation over years of being a student of how money "works". And, it just seems to find itself in the hands of those who give it away.

So--was any of this convincing? Did it help you see things in a new light? Let me know...

As your estates lawyer in Houston, I hope this was simple and straight--as usual.