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 Post subject: Why is it that giving money is good?
PostPosted: Thu Apr 05, 2007 10:58 am 
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I feel quite strongly that giving money away is a really good thing, but I can't quite put my finger on why.

Obviously its good for the people receiving the money. I donate based on my values, so I guess that its furthering them.

I'd appreciate any suggestions.

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PostPosted: Thu Apr 05, 2007 11:46 am 
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Helping the less fortunate is simply the right thing to do. Those with more have a moral obligation to help those with less.

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 Post subject: Re: Why is it that giving money is good?
PostPosted: Thu Apr 05, 2007 12:20 pm 

Joined: Wed Apr 04, 2007 7:18 pm
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Location: Rochester, NY AND Los Angeles, CA
plonkee wrote:
I feel quite strongly that giving money away is a really good thing, but I can't quite put my finger on why.

Obviously its good for the people receiving the money. I donate based on my values, so I guess that its furthering them.

I'd appreciate any suggestions.


This might be a weird analogy, but stick with me. I'm a knitter, and I basically never knit anything for myself. Almost everything I knit, I'm making for someone else. For all the time and effort I put into each piece, it feels better the whole time I'm making it if I know it's going to someone else. I've only made a couple things just for me, and I simply don't get as excited about it.

Ok, that doesn't really answer the "why," but I guess I'm saying it isn't just with money.

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PostPosted: Fri Apr 06, 2007 12:03 pm 

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Love is a verb. Giving is an expression of love. Those who are more able and willing to give and receive love, report having more than average happiness. Giving money (something of value) makes perfect sense in the context of improving oneself and one's life.


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PostPosted: Fri Apr 06, 2007 12:19 pm 
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Try to imagine a world where no one gave, and I think you will have your answer.


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PostPosted: Sat Apr 07, 2007 1:44 pm 

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Uh oh, I'm about to find myself playing devil's advocate.

Quote:
Helping the less fortunate is simply the right thing to do. Those with more have a moral obligation to help those with less.


In my gut I agree. But wait, there are always those who are less fortunate.

If I make $50,000 and give away 10%, I still have $45,000 (let's ignore taxes for simplicity). $45,000 can support a fairly comfortable lifestyle. Meanwhile, people are starving elsewhere in the world. Perhaps I buy a new TV for $1000. That money could pay for food for several families for a year. Surely if we have a moral obligation to help the less fortunate, it's inexcusable to buy a TV while others are starving?

So what is the right amount to give away? 10%? 50%? 95%? If one stops at 10%, does that mean that he cares, but just not very much?

I don't mean to be inciteful.. This is a topic that fascinates me. I think most of us who give are ultimately hypocrtical about the *real* reasons.

Sam

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PostPosted: Sat Apr 07, 2007 1:47 pm 
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samerwriter wrote:
Uh oh, I'm about to find myself playing devil's advocate.

Quote:
Helping the less fortunate is simply the right thing to do. Those with more have a moral obligation to help those with less.


In my gut I agree. But wait, there are always those who are less fortunate.

If I make $50,000 and give away 10%, I still have $45,000 (let's ignore taxes for simplicity). $45,000 can support a fairly comfortable lifestyle. Meanwhile, people are starving elsewhere in the world. Perhaps I buy a new TV for $1000. That money could pay for food for several families for a year. Surely if we have a moral obligation to help the less fortunate, it's inexcusable to buy a TV while others are starving?

So what is the right amount to give away? 10%? 50%? 95%? If one stops at 10%, does that mean that he cares, but just not very much?

I don't mean to be inciteful.. This is a topic that fascinates me. I think most of us who give are ultimately hypocrtical about the *real* reasons.

Sam


You know exactly what I mean. Stop being difficult. ;)

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 Post subject: Giving
PostPosted: Tue Apr 10, 2007 2:35 pm 

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When I was featured in a newspaper's financial makeover, I was irritated by a request to send 5-10% of our pre-tax earnings to charity. The newspaper re-wrote our budget to show such contributions. While I've always believed in supporting charities, I was annoyed by the idea that what we were giving was not enough. Money was the only thing that counted. The hours and hours I spent volunteering didn't seem to matter. The discounts I gave charities on my consulting services didn't matter. But, in reality, volunteer work and discounts do matter. I guess the newspaper didn't want us to look like we were cheap. But simply cranking up a contribution doesn't show the whole picture.

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PostPosted: Tue Apr 10, 2007 3:27 pm 

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samerwriter wrote:
So what is the right amount to give away? 10%? 50%? 95%? If one stops at 10%, does that mean that he cares, but just not very much?


Sam, there was an article about exactly this topic in the New York Times magazine on December 17, 2006, by Peter Singer of Princeton University. It was entitled "What Should a Billionaire Give -- And What Should You?" It's a fascinating article, and I recommend it highly; reading it had a huge effect on me. It's available here:

http://www.utilitarian.net/singer/by/20061217.htm

Singer, who is a bioethicist, took a very logical and data-substantiated look at the question of how much one "should" ethically give away in order to help reduce world poverty (he himself gives away 25% of his income every year, mostly to Oxfam, although he doesn't mention that in this article).

Here are his recommendations:

If you're one of the 14,400 US taxpayers who earn more than $5 million a year, Singer recommends giving away 33% of your income each year.

If you're one of the 129,600 US taxpayers who earn more than $1.1 million (excluding the group above...this rule applies for all the categories below), you should give away 25 percent of your income.

If you're one of the 575,900 taxpayers who earn more than $407,000 a year, give away 20 percent of your income.

If you're one of the 719,900 taxpayers who earn more than $276,000 a year, give away 15 percent of your income.

If you're one of the 13 million taxpayers who earn more than $92,000 a year, give away 10 percent of your income.

Here's Singer's home page at Princeton, in case you want to read more of his writings:

http://www.princeton.edu/~psinger/index.html


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PostPosted: Tue Apr 10, 2007 6:53 pm 
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This is the first forum thread that will be used for an entry at the blog. Brad, that article is outstanding. Thanks, Plonkee, for asking the question. Barring misfortune, the entry will go live at 5am and be the only entry of the day (aside from Saving and Investing).

Update: What should a billionaire give, and what should you?


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PostPosted: Wed Apr 11, 2007 7:51 am 

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To be honest, it's not clear to me how Singer substantiates those percentages. They seem about as arbitrary as income tax rates. The article is data driven only to the extent that if you add up the percentages he recommends, they allegedly equal some arbitrary number the UN came up with.

And I think it ignores the crux of the question.

If we give because we care about other people, why should someone making $92,000 per year stop at 10% of his income? Or 50% of his income? Stopping at 10% would imply that we give to assuage guilt, not because we care.

Put another way, my reasonably modest car cost about $20,000 new. $20,000 could feed nearly 200 people in a developing country for a year. If I were to claim that the money I donated to charity last year was because I cared about others, one could argue pretty persuasively that buying a car while 200 people go hungry, yet claiming to care about others, makes me a hypocrite.


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PostPosted: Wed Apr 11, 2007 8:28 am 
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From an economics perspective, our free market rewards wealth-producers. If they keep that wealth, its a bum deal. So by giving some of it back, which is more than the society would have produced ceteris paribus, charity keeps the system in place.

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PostPosted: Wed Apr 11, 2007 8:33 am 

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samerwriter wrote:
To be honest, it's not clear to me how Singer substantiates those percentages. They seem about as arbitrary as income tax rates. The article is data driven only to the extent that if you add up the percentages he recommends, they allegedly equal some arbitrary number the UN came up with.

And I think it ignores the crux of the question.

If we give because we care about other people, why should someone making $92,000 per year stop at 10% of his income? Or 50% of his income? Stopping at 10% would imply that we give to assuage guilt, not because we care.

Put another way, my reasonably modest car cost about $20,000 new. $20,000 could feed nearly 200 people in a developing country for a year. If I were to claim that the money I donated to charity last year was because I cared about others, one could argue pretty persuasively that buying a car while 200 people go hungry, yet claiming to care about others, makes me a hypocrite.
Sam


Maybe there is a weakly Pareto efficient level of giving. I would imagine that the person making $92,000 a year would be nearly as well off after giving 10% of his income (if you assume he gets some pleasure from the act of giving) and the beneficiaries of the charity might be MORE than 10% better off with that $9,200. But the change from 40% to 50% given away might mean his standard of living declines by more than the beneficiaries gain.

I don't claim this is the answer. I claim that it's a way of thinking about the question that doesn't make someone a hypocrite.

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Last edited by onebigmortarboard on Wed Apr 11, 2007 8:35 am, edited 1 time in total.

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 Post subject: Re: Giving
PostPosted: Mon Apr 30, 2007 12:23 am 
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consultantjournal wrote:
When I was featured in a newspaper's financial makeover, I was irritated by a request to send 5-10% of our pre-tax earnings to charity. The newspaper re-wrote our budget to show such contributions. While I've always believed in supporting charities, I was annoyed by the idea that what we were giving was not enough. Money was the only thing that counted. The hours and hours I spent volunteering didn't seem to matter. The discounts I gave charities on my consulting services didn't matter. But, in reality, volunteer work and discounts do matter. I guess the newspaper didn't want us to look like we were cheap. But simply cranking up a contribution doesn't show the whole picture.


I could not agree more with this. My wife and I do give money, but more and more we give time. For example, giving hair cuts to homeless men that are trying to get jobs is fulfilling for us and directly helpful to those who need it. This is not a percentage of our income, but certainly counts. The fact is, I make enough to support us, and my wife chooses not to work for money, but gives her time instead. I work and give time (though less than my wife is able to.) We give time in a variety of ways for a variety of causes. The amount of our income that we give is certainly less than 10%; probably less than 3% (I don't actually know how much as we don't ever keep track nor claim it for taxes -- too much trouble.) Nonetheless, I feel that what we give is more than most. I could care less if someone thinks we look cheap by the numbers. We know what we do. I probably would have told them to write it up the way it is, or pull the piece. If we're doing these things to impress people, we're doing them for the wrong reasons anyway.


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PostPosted: Mon Apr 30, 2007 9:23 am 
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I look at it this way. I never give money away. Never. However, I make what I consider to be, wise investments. :)

I invest in things like the anti-cruelty society because I believe that I directly benefit from living in a city where strays are controlled.
(I've also adopted both of my cats there. One of which is keeping my toes warm at the moment, so another good investment.)
I feel that one way or another, I pay for major illnesses, so it is worth it to me to invest in cancer research, AIDS research, etc.
Even people asking for money on the street, I consider the return on my investment. Some days I feel that a polite request and a connection with another human being is a great return on a dollar. Hearing some music on my way to work is worth the investment too.

Granted, it sounds a bit mercenary, but if you really need to convince yourself that giving is financially responsible, you can look at it this way.


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