By Elizabeth Kerr
Have you heard of the John Templeton Foundation? It’s an organisation which supports scientific research on spirituality and the BIG life questions such as ‘Will the free market corrode moral character? Or ‘Will science make God obsolete?
It’s bloody fascinating stuff.
This week they’ve come out saying that children who grow up in non-religious homes are more generous than those in religious homes.
Hands up if you thought it would be the other way around?
I have no opinion on whether this is true/right/wrong but this got me thinking about generosity – specifically where might charitable donations, tithing and gift giving fit within your money machine goals.
It turns out if you want to build a money machine one of the surest ways to get there is to give your money away.
No, I haven’t lost my marbles. Just keep reading…
Starting with Science!
Researchers at the University of Columbia analysed people’s budgets and discovered that those who spent more money on other people than they did on themselves were so much happier and content with their lives than the others.
So imagine that you have $20 and you are in a florist shop and you can spend the $20 on a bunch of flowers for yourself or on a bunch for someone else.
If you spend it on yourself then you are at the mercy of Hedonic Adaption.
You buy the flowers, take them home, put them in a vase, admire them for a day or two and then you forget them until they are wilting all over your tablecloth and you have to throw them out. Within a year you quite possibly have forgotten you even brought them.
However, spend the time choosing the perfect bunch for someone else and you get a time bank of warm fuzzies, which will last forever because gift giving isn’t subject to hedonic adaption. You get joy from picking the flowers, joy from imagining the surprise of the recipient, joy from their happy reaction and afterwards the awesome feeling of knowing you made a good impact in that person's day. Now every time your brain recalls giving that gift you will feel all of these feelings as clearly as you had when you originally gave the flowers, no matter how long ago it was.
Now pay attention, the punch line is coming up!!! The really great news about this phenomenon is that this giving needn’t cost you a fortune. A small $5 to someone who really needs it delivers the same return on investment in your own gratitude and contentment as say $200 might.
So, why we aren’t all selfless gift givers or charity donators? It’s because we are all a bit arrogant and stupid!. The researchers probed a little further and found that we actually think it’s the other way around – we think that buying stuff for ourselves will make us happier than giving it away. Given the choice in the florist most people will choose to buy flowers for themselves first. But as I’ve illustrated, the happiness is only short lived.
The complexities for how this all fits inside your money machine goals are subtle and worth understanding.
You see, after you’ve paid for all of your non-negotiable needs and set aside money for your money machine, anything that is left over could be wasted by buying cheap clothes or unnecessary goods and services that eventually clog up our landfills.
Or it could be used to support things that you feel passionately about, and in turn bring about a deep content for your own good fortune.
A while back I talked about how the way you spend your money is a reflection of your values. I like to think of donations as empowering people to do the things that I physically can’t do right now in this season of my life, but which I think are really important. No, I’m not referring to a gardener or cleaner, I mean the scientists and community workers who actually have an impact on people’s lives. The people who run breakfast clubs in low decile schools, support women at Womens Refuge, provide gumboots and jackets to those who need them, and house and educate teen mothers. I can’t do any of those things right now so I get pleasure from knowing I’m supporting those who can. Empathising and supporting those who really need help with their own non-negotiables like this can bring you a huge sense of peace with your own financial place in the world.
Should I tithe or donate before my money machine is completed?
This is a very good question. My surface answer is that ‘it depends’. If you have calculated when your Money Machine will be ready (for your early retirement) based on your current savings percentage AND you are happy with that progress knowing that it includes tithing’s and donations then you have your answer.
My personal take on it is that giving begets receiving. Financial karma is a bit harder to demonstrate in an excel spreadsheet. But if you look at most wealthy people the really happy ones are always giving their money away and lack for nothing. The Bible goes into great detail about this – but I’ll save that for another day (unless you tell me otherwise).
Taxes and your donations
Donations that are over $5 are subject to tax deductions provided the donation is made to a registered charitable company. Most churches are included in this so if you are a regularly tithing then be sure to keep your receipts or ask your church for a statement at the end of the financial year outlining your contributions. Loose change in the offering basket is harder to prove as yours, so, you need to use a giving envelope or internet banking transfers.
A valid receipt must contain:
- the name of the donor(s)
- the amount and date of the donation
- a clear statement that it is a donation
- a clear statement at the top of the page if the donation is a payroll giving donation
- the signature of an authorised person, and
- an official stamp with the name of the approved donee organisation.
As we close this week, I leave you with this: Giving money away to worthy recipients makes you realise just how lucky you are with what you have; and contentedness is the biggest weapon you can have against aggressive consumer marketing.
As we enter into the biggest consumer drive in the lead up to Xmas, try to stop for a moment and think about how you can bless those around you rather than buying into the crazy Xmas shopping chaos. Science guarantees you will take more long-lasting pleasure in the gifts toward those in real need than you will in any for yourself.