What are the moral implications of spending?

Most reader questions I share at Get Rich Slowly are meant to solve a problem — somebody has a financial dilemma they're hoping you folks can help them fix. But Rita sent a different kind of question. She doesn't want to solve a problem — she wants to stir debate. Rita writes:

I ask myself “How much is enough?” several times daily. My husband and I make good money — over $100,000 in combined income — own a home in an expensive city, have two large dogs, and are able to buy most of what we want. I don't have a problem with normal spending, but I often feel bad when I purchase something really nice (such as a nice purse, a collectible book, etc).

  • On one hand, I can afford these things.
  • But on the other hand, I still feel that it's somehow wrong that I continue to buy this stuff while many people in the world cannot afford clean water and food.

Just yesterday, I read an article on an entertainment site about Steven Spielberg's $200 million personal yacht. I think that this a a crazy, immoral waste of money. He could make a HUGE difference by using that $200 million for charity.

I guess my point is: Am I really any better? No, I'm not buying a yacht anytime soon, but I do buy luxury items. And someday I'd like the satisfaction of being able to buy my husband a Range Rover. (He loves those damn cars.) My husband doesn't feel guilt for having these things, but (if I'm being completely honest with myself) I do. Oddly enough, I majored in finance in college and am currently studying for the CFA exam, so the topic of “efficiency and equity” is really on my mind.

Four years ago, prompted by this thoughtful essay in the New York Times, I asked: What should a billionaire give, and what should you?

In this essay, philosopher Peter Singer discussed the magnitude of charitable donations from the two richest men in the world: Warren Buffett contributed $37 billion to charitable foundations, and Bill and Melinda Gates gave $30 billion. Singer wrote:

Philanthropy on this scale raises many ethical questions: Why are the people who are giving doing so? Does it do any good? Should we praise them for giving so much or criticize them for not giving still more? Is it troubling that such momentous decisions are made by a few extremely wealthy individuals? And how do our judgments about them reflect on our own way of living?

Singer's article discusses the ethics of giving, and tries to establish some guidelines. (It's a fascinating read but it's long, so budget half an hour or so.)

After years of dithering, I'm finally moving forward with philanthropy in my own life. I've been researching (and finding!) causes to support. I've been exploring the possibility of volunteer tourism. And one of my goals for Awesome People is to donate all profits to charity. (I'll share more about my forays into philanthropy in coming months.)

But Rita's question is about more than just giving. It's also about consumption. When we buy things, there are ramifications across a vast economic web. This is why some people are willing to pay a premium to buy local or to buy organic. It's also why some people insist on buying American and others boycott specific items. (Some people refuse to buy diamonds; my high-school social studies teacher refused to buy bananas.)

On a basic level, every time we choose to buy a comfort or a luxury, we're also making the choice not to use the money to help somebody else — whether in our own community or in the world at large. To what degree is this acceptable? To what degree is this reprehensible?

xkcd: Charity
xkcd tackles the morality of spending…

This goes beyond just the personal level, of course.

    • Today as I drove into downtown Portland, I passed the $37,000,000 Mercy Corps building. I winced when I saw it. Mercy Corps does great work, but how much more great work could it have done with the money it spent for its new headquarters?
  • Or what about the humble country church my family attended when I was in high school? About a decade ago, the congregation spent tens of thousands of dollars to pave the parking lot and to build a new kitchen, gymnasium, and office. Is this what Jesus would have done? Or would he have used the money to help the poor?

I used to think there were clear answers to questions like these. Now I'm not so sure. What is right and what is wrong? What are the moral implications of spending, especially on Wants? (I doubt anyone would argue that we shouldn't spend on our own Needs.) If I spend $1500 for a pair of season tickets to the Portland Timbers, is this immoral? What if I also contribute $15 to a charity to make amends? $150? $1500? And at what point am I just “buying” a mental pardon?

Some of you will argue loud and long that there aren't any moral implications to spending. Others will argue just as loudly (and just as long) that every economic act carries a moral and ethical component, that our financial decisions have meaning. I can see both sides.

What do you think? What are the moral implications of spending? When is it okay to buy a $200 million yacht? Is such a decision ever justifiable? Always justifiable? If Steven Spielberg also donates $200 million to charity, does that ameliorate this obscene expense? And what about on a more mundane scale? Are there any absolutes? How do you decide?

Note: Although this question is likely to stir more passionate debate than usual, let's abide by the standard rules. You're free to disagree with each other (and with me), but please do so respectfully. Keep things civil. As long as everyone's polite, I think this could be a fine discussion.
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Kate
Kate
9 years ago

Funny this question should come up now. I’ve just been wrangling with this question in my own life. We recently took a trip. We went to Asia for the weekend (from the East Coast of North America). There was an amazing seat sale, we had a long weekend with no plans, we have the money, we pay extra on to the mortgage, no debt, etc. etc. It was wonderful and something we (very likely) won’t be able to do one day when we have kids. But we very nearly didn’t do it because of these questions: And yet, I was… Read more »

Liz
Liz
9 years ago
Reply to  Kate

I have always worked very hard to be “good.” I worked during high school, worked during college (including during a semester abroad), and pursued very tough curricula (IB/AP, double major with research projects plus an honors thesis). My sister has always traveled extensively – Hungary, Switzerland, Morocco… but I’d never been able to visit her. I never thought it was “right” to spend my money on such luxury. The summer after graduation, however, I knew I needed something to re-set after a rough “senior” year (I graduated in three years…). I was already planning a trip to Calgary to present… Read more »

Marsha
Marsha
9 years ago

I have no problem with someone analyzing their own spending; I do this myself all the time. The difficulty begins when someone decides another person’s spending is immoral or “obscene.” I worry that our society is headed toward a war between the haves and the have-nots, and the day will come when a person is not allowed to spend his money as he wishes.

james l
james l
9 years ago
Reply to  Marsha

Exactly, we have the right to choose how to spend our own money. It immoral to tell others how to best spend theirs. How many people are employed serving peoples wants? Millions, if people stopped buying wants they then might end up needing charity themselves because no one needs their goods anymore. Think of how many people where employed creating a $200million dollar yacht. from the miners and loggers, to the steal mill a wood mill workers. to the welders and craftsmen, to the designer and foreman. That $200m didn’t just disappear, it went from hollywood(someones wants to see a… Read more »

Erica
Erica
9 years ago
Reply to  james l

What a good answer!

StL Reflections
StL Reflections
9 years ago
Reply to  james l

Two things- 1) Give a man a fish is not a quote from Jesus. I’m not quite sure where it’s from, but most sources suggest its a Chinese Proverb. Jesus said ‘give all you have to the poor, and come and follow me.’ 2) I don’t think its ‘immoral’ to tell people how to spend their money. At its most obvious, its always wrong to buy child prostitutes, hitmen, or pay someone who is desperate to risk their lives on your behalf. I would even argue for some more controversial rules-charitable giving is ethical, and everyone, particularly rich people like… Read more »

LifeAndMyFinances
LifeAndMyFinances
9 years ago

Obviously, a $200,000,000 yacht is a bit excessive, but this is a pretty tough question. How much is too much? My wife and I are on course to be moderately wealthy in a few years, and I’ve often asked myself this very same question. Ultimately, I don’t think it’s the right question. The more appropriate question is, what brings true happiness? For many of us, we believe that stuff will make us happy. Frankly, this is just stupid. Stuff is fun for a while, but ultimately, it’s relationships that matter. Money should be used to help others in this world,… Read more »

Danielle
Danielle
9 years ago

I agree with everything except your last paragraph, particularly this line: “A $200 mil yacht is selfish, and so is a Coach purse.” If you enjoy purchasing luxury items once in a while, and can afford them, why not? The pleasure I get from my really nice brand-name bag (great construction, fabulous-feeling material, sturdy and useful pockets) is worth it to me. I am an ethically-minded person who works for a non-profit organization. I also don’t LOVE shopping that much and would rather buy a few nice pieces of clothing or accessories than a bunch of lower-quality items that may… Read more »

Ru
Ru
9 years ago
Reply to  Danielle

Also, what if the higher priced one is the more ethical product? A £20 handbag was most likely made by slave labour in a 3rd world country using their local resources that probably weren’t harvested in the best of ways. Isn’t it better to spend £100 on a handbag hand-made by a fashion student who lives in the same city as you and sourced their leather from a UK tannery? Personally, I think all consumption in wrong. Yes, all consumption. Humans are a fundamentally flawed species who over consume in every way and have wrecked the planet. We are a… Read more »

El Nerdo
El Nerdo
9 years ago
Reply to  Ru

I was following you merrily until you said you would do away with all consumption. Maybe the earth doesn’t consume (though it’s fed “freely” by the sun, making her a trust fund baby), animals however need to consume in order to exist. We then return our remains to the recycling plant so they can be used in the production of new units. May sound mechanistic to you, but I think it’s a beautiful way to live.

Amanda
Amanda
9 years ago
Reply to  Danielle

I’m not disagreeing with you, I like post #2, people have the right to spend their money on what they want. But I don’t like it when people use the “excuse”- “it’ll last longer” with something like a purse. I don’t think a $400 purse will last longer than a $100 one. I also don’t think that my $100 bag has lasted much longer than one I could have gotten for $40 in a department store. I also think some higher priced garments definitely WILL last longer.

Meg
Meg
9 years ago
Reply to  Amanda

Some higher priced items do last longer (I’m convinced this is most true for leather goods – shoes, purses, et al., provided you’re careful to pick a color that will last a long time such as brown or black). I’ve had the same favorite dress shoes since high school, and I still wear them to work.

Sara
Sara
9 years ago

This is pretty much exactly what I was going to say. The recent posts here on GRS about how money CAN buy happiness pointed out that it’s not in the way of buying an expensive purse. True happiness has to come from within, and even the excitement of an expensive yacht will wear off eventually, and may even bring about more problems in one’s life. I also feel that fundamentally we’re lying to ourselves if we think that our purchases of items don’t come at a cost to someone else, whether it be from underpaid labor or the environmental impact… Read more »

mv
mv
9 years ago

LifeAndMyFinances (comment #3): You’re last paragraph is very judgmental. I took a peak at your website and found: — Since I am typically “the finance man”, I am often so focused on putting money aside to pay off our debts that I forget about our many blessings and our opportunities to give. Thankfully, my better half has a heart that’s the size of King Kong (no physical resemblance though), and makes me aware of al the worthy causes available. — Interpretation – you are so completely focused on yourself (selfish) that your better half has to remind you to be… Read more »

April411
April411
9 years ago
Reply to  mv

Umm a coach purse is selfish? I can see how that would be the case if I was living paycheck to paycheck and decided to buy a purse instead of buying shoes for the kids or something. But, honestly a coach purse holds up better than one from target.(I speak from experience.) We were at the coach outlet in Vegas and my hubby told to to get one if I wanted. There was a nice one on sale for $200. I thought it was too much so I declined. I just noticed that my recently purchased $30 target purse has… Read more »

Omatix
Omatix
9 years ago
Reply to  mv

I don’t think the poster was trying to pass a judgement on the “selfish” buying of a Coach purse. I interpret it such that certain luxuries may benefit nobody but ourselves, but that doesn’t mean we can’t indulge occasionally. A $200 million yacht may also be “selfish”, but it’s a quantitative difference, rather than a qualitative one. We all have to choose where to draw the line.

Nicole
Nicole
9 years ago

I think this xkcd comic is really good: http://xkcd.com/871/ On a more serious note, it can be good to budget one’s charity. Choose a dollar amount or a percentage amount of income or some other target, just like any other portion of what you spend. Then plan your spending around that. Like the comic, you don’t want giving to be a chore and something that causes you deprivation… if that happens you might stop giving at all. By planning charitable giving first, just like you plan savings first, you should be able to spend guilt free, because your spending choices… Read more »

J.D. Roth
J.D. Roth
9 years ago
Reply to  Nicole

Thanks, Nicole. Adding that comic to the post.

Name (Required)
Name (Required)
9 years ago
Reply to  J.D. Roth

Here’s a great Louis C.K. video that addresses this issue:

http://www.youtube.com/watch?v=lC4FnfNKwUo

savvy
savvy
9 years ago
Reply to  Nicole

This is exactly what I do. I give away more than 10% of my gross income annually. I don’t feel guilty about my splurges because I know I’m generous to others as well. Over time (after we pay off the mortgage, etc.), I would like to up my percentage even more. I think it’s important to give but I don’t think you have to be a (financial) martyr either.

imelda
imelda
9 years ago
Reply to  savvy

Exactly; that’s the only way to do it, I think. Make charitable giving a part of your life, but not so large that it’s making you suffer. In the social justice field, burnout is a huge problem. People throw everything they have into their work, and after a few years they are so emotionally drained that they just can’t keep going. It’s the same thing with finances – the xkcd comic illustrates this, ironically. There comes a point when you’re asking too much of yourself, and when that happens, your response is going to be to do nothing. And THAT… Read more »

saro
saro
9 years ago
Reply to  imelda

Re Mercy Corps building, it could also be that the new building is more cost efficient over the long term (better insulated – lower utilities; more room – no need to rent big conference rooms for big meetings & etc). I used to work for another highly regarded non-profit and they refused to let us buy a vehicle b/c it would make their numbers look bad, even though it would have had a HUGE positive impact on reaching the needy community. And there was funding for it! I also get irritated when people are upset with non-profit salaries. They deserve… Read more »

Annemarie
Annemarie
9 years ago

“…every economic act carries a moral and ethical component” Yes, and the debate itself goes back to the idea of self-discipline. People used to flagellate themselves to get control over mind and body, now we worry about ethical spending (and eating habits, and smoking and so on). I’m not saying it’s wrong, but that it taps into something basic. And of course the spending — moral, immoral, outright ridiculous — means jobs for the people who make the stuff. (my husband is one of them; I’m very grateful for the folks who bought hand-forged curtain hardware all through the recession.)… Read more »

Jan
Jan
9 years ago

The assumption with consumption is that no one wins. When Steven buys that yacht he actually employs tons of people. People who: built the yacht (including the hull, radios, buoys, rails,ropes….), put the yacht together, food services, janitorial, sales, advertising, financiers, maintenance (we have a small boat and it lives for the shop!), yard hands, chummers, tackle producers, pilots (for the helicopter) goes on and on. The Pitt- Jolie spend more than a million just on child care every year. Those are great jobs for those who are in that line of work. Really- how do you make YOUR money… Read more »

siredge
siredge
9 years ago
Reply to  Jan

Well said. After reading the original post, I was thinking along the same lines and came to make sure this point of view was represented. It is not just okay, but virtuous to pay someone for their quality work or to receive payment for quality work. When you employ others through patronizing their employment, then you encourage them to grow. Charity has to be structured very carefully to achieve the same. Also, folks spending on those yachts and luxury items develop new technologies and processes that are too expensive for mass-production up front, but over time can seep down into… Read more »

Julia
Julia
9 years ago
Reply to  siredge

Agreed and well said by multiple people on the “consumption promotes a better standard of living” front. It may not jive with our altruistic sensibilities but from an economic development point of view, it’s usually better to provide people — and usually specifically women — with a means of earning a living than it is to give them handouts. (The hardest part, as mentioned by one commenter, is the country’s government must be stable…in some cases giving people the food and clothing and shelter they need to survive is the only way to go.) A very interesting and readable older… Read more »

anonymous
anonymous
9 years ago
Reply to  Jan

I question the appropriateness of focusing locally. It’s a convenient rule, but it will perpetuate inequalities. It also seems a little arbitrary: If some people 50 miles away need better textbooks but people 5000 miles away need food and water, we’re supposed to believe the people 50 miles away are more deserving of our attention?

Jenny1337
Jenny1337
9 years ago
Reply to  Jan

I definitely agree that consumption provides jobs to needy people, but I think that those that need it most don’t have the opportunity to have such jobs. Buying a boat or a luxury purse helps skilled craftspeople, but doesn’t help so much starving children in africa (who are too hungry, and diseased to learn a trade). I like to think that the best charities help people enough to get on their feet, and give them a push in the right direction (and if you did your job right, they can take it from there). The problem is when people get… Read more »

Brenton
Brenton
9 years ago
Reply to  Jenny1337

Starving children in Africa are starving due to government instability. Stable governments breed stable economies, which over time will improve the fortunes of everyone in the country.

No amount of charity will ever lift the children out of poverty if the country doesnt stabilize first. In fact, aid usually ends up in the hands of the corrupt strongmen who just perpetuate the instability.

Also, free food, free clothes, etc… given out often help destroy local demand for food, clothes, etc…

Charity and aid should be reserved for refugees fleeing a disaster, either manmade(like war) or natural(earthquake).

Chett
Chett
9 years ago
Reply to  Brenton

What about charity to education organizations that help the people learn to think for themselves and form better governments for their future?

Suzanne
Suzanne
9 years ago
Reply to  Brenton

As a fundraiser for an educational institution, I couldn’t agree more Chett.

Pamela
Pamela
9 years ago
Reply to  Brenton

Of course, a contributing factor to government corruption and instability is the destabilizing work of developed countries trying to get resources for their own production and consumptions. And now we’re back to making choices about what we buy, where it comes from, and who it hurts.

JoeTaxpayer
JoeTaxpayer
9 years ago
Reply to  Brenton

Yes, Brenton, you are right. When we send food that doesn’t make it to those starving, the answer is not to send more food. We first need to have relationships with those governing these poor and start by having their support. Desalination plants are made small, portable, and solar powered. Teach proper farming, then bring in education. I am as much against child labor as anyone, but if that child is working to pay for food for the family, stopping their work may cause them to starve. I certainly don’t have all the answers, but whatever we are doing now… Read more »

barnetto
barnetto
9 years ago
Reply to  Jan

You can say, the $200 million yacht put people to work and did good because it allowed them to feed and take care of their own families needs and wants. But say $200 million goes to purchase mosquito netting, vaccines, etc. The people who manufacture mosquito netting, vaccines, and other items can then feed and take care of their families. Basically wherever we make our economic demands, the people and the jobs will shift. Its a conscious absolving rationalization to say that purchasing a $200 million dollar yacht helps other people. What are the opportunity costs of that $200 million… Read more »

B.
B.
9 years ago
Reply to  barnetto

So if it’s immoral to pay $200M for a yacht, is it also immoral to build a portion of the yacht and accept payment for it? I think that the answer has to be yes. But since I can’t imagine that it’s immoral to be paid for work (yacht builder), then I don’t see how it can be immoral to pay someone for their work (Spielberg). Or think of it this way. How did Steven Spielberg make his millions? He made entertaining (and well-marketed) movies. Would the money that we spent on tickets to Schindler’s List have been better used… Read more »

Sara
Sara
9 years ago
Reply to  B.

Well said, B.

james l
james l
9 years ago
Reply to  barnetto

Wouldn’t it be better for people how needs netting to have a job so that they could afford to buy their own netting. What if that job was mining minerals that went into building $200m yachts?

Katy
Katy
9 years ago
Reply to  Jan

So perhaps the moral here is to spend money on industries and companies that you feel are self-sustaining and ethically run. We heavily investigate the charities we donate to. Why don’t we do the same with other purchases? -By purchasing an electric car, for example, you are supporting that industry and enabling a company to develop a cheaper product down the line. Emerging technologies have major start-up costs and often rely on affluent “early adopters.” -Supporting ethically raised meat products (whatever your own personal standards may be) means paying a few extra dollars so your meal didn’t suffer before it… Read more »

John
John
9 years ago
Reply to  Jan

Was thinking the exact same thing – i this debate you have to consider job creation and the types of jobs as a positive offshoot of spending. I might add that high end (and probably customized) items like yachts employ highly skilled (probably domestic) craftsman and manufacturers, while something like a purse or shoes are outsourced to lower-skilled labor. Not a judgement here, but it’s something to consider when making purchases – what kind of jobs are you supporting. Same reason I try to seek out locally grown produce – more expensive but I want to support that type of… Read more »

Dar
Dar
9 years ago
Reply to  Jan

As other commenters have noted in their replies, “Well said.” I have no problem with people going out and spending money on themselves because it keeps the wheels in this economy moving and keeps people employed. The more the money changes hands the better, and when it gets taxed at each exchange along the way, then society gets a net double win–employment in the free enterprise and tax money for our infrastructure. I do and will continue to donate to charity because some causes are worthy and aren’t otherwise supported by consumer spending. But I have no qualms about spending… Read more »

Steven
Steven
9 years ago
Reply to  Jan

It seems what people are trying to do is justify spending on a huge consumer purchase with a cost/benefit type of analysis. I am not going to comment on whether or not the purchase of a $200 million yacht is moral (I haven’t even decided for myself), but just want to comment on some alternatives. Someone else suggested mosquito nets and vaccines, and the example I had in my mind is cancer research. Spending/donating money to any of these causes creates jobs, but not all the same jobs, and not with the same economic impact. As far as job creation,… Read more »

Marcus Byrd
Marcus Byrd
9 years ago
Reply to  Jan

Jan, You said it right! There is no problem with us buying and not feeling a sense of guilt about it. It becomes obsurd quickly when we begin doing the “If you really cared then you would…”. Don’t ever buy a Big Mac, if you really cared you would buy a sandwich from the dollar menu and donate the saved $3 to charity. Really? I don’t care about others if I buy something for myself? It is oppurtunity cost. Whenever we spend our money, then we lose the oppurtunity to use that money for other things. If you can afford… Read more »

Andrea
Andrea
9 years ago

Well, I am somewhat similar to the writer. We have no debt(no mortgage and nothing else)and are retired with pensions and 401Ks plus more than enough to keep us more than decently. We have traveled, we have fixed up the house but we give to charities as well as using our retirements to volunteer at a number of places on a regular basis. What is morally wrong or right? I think there are people who could give more and do not-esp among the really rich. However, I don’t really know what they do or don’t do with their money. What… Read more »

mdb
mdb
9 years ago

If every one gave all their “excessive” income to charity, their would be a lot less “excessive” income to give. People respond to incentives, for most people that is money. Through their hard work the world is a better place. Charity is good but should not be expected. Bill Gates helped more people earning his billions than he has helped through his charity. Think of how many discoveries, enhancements, etc. have been created thanks to cheap computing.

Niel Malan
Niel Malan
9 years ago
Reply to  mdb

Of course, when Bill Gates was making his money he was helping people who had already been helped, i.e. people who had computers (which are not cheap by Third World standards) and electricity to drive those computers. Now he’s helping people who has not been helped before.

Nancy L.
Nancy L.
9 years ago

The other day on “Survivor”, a tribe had conflict bc one member wanted the “crispy rice” at the bottom of the pan and they were saving it for another. Even when you get down to the barest existence there are still natural inequities–not everyone could have the crispy rice. It’s physically and emotionally impossible to exist in this world without taking resources that another could use. Until you are the worst off in the world, there will always be someone who needs your resources “more” simply due to their relative lack. I see the point in helping others to the… Read more »

lostAnnfound
lostAnnfound
9 years ago

The question is difficult for me to answer because in some ways I cannot fathom spending 200 million on anything. It’s such a huge amount of money for the average Joe or Jane to contemplate.

But who I am to say what someone should or should not give to any charity, or how they spend money on their wants/luxuries? If it’s your money that you earned, then it is your decision to make. I would only hope that those that have so much would be willing to help those that have very little, or nothing.

LC
LC
9 years ago
Reply to  lostAnnfound

I agree with you. It’s not my place to judge how others do or do not spend their money, and I don’t appreciate those who judge how I spend mine.

Katy
Katy
9 years ago
Reply to  LC

I don’t think anyone here is telling you how to spend your money. Rita, on the other hand, has generously requested that we judge her for the sake of a thought experiment.

So she’s totally fair game. 😉

LC
LC
9 years ago
Reply to  Katy

Right, I just struggle with that concept. I am incredibly critical of my own spending and am conscious of those decisions. I find it appropriate to reflect on the whys of my choices and frequently assess my budget, including spending and charitable giving. When others invite the outside opinions of others, I have a hard time walking a line between judgement and the sharing of my personal experience/vantage point. What’s right for me or what makes sense to me, may or may not add value to your own situation or be relevant to your decision making process.

Katy
Katy
9 years ago
Reply to  Katy

True, and we all come from somewhat different backgrounds. I don’t give anything worth mentioning to charity right now, but I do feel a strong compulsion to give back to society. When I think about the circumstances that produced my current, happy, motivated self, I am floored at my luck. So why don’t I donate more to charity? Why don’t I volunteer much of my time? To use a video game term, I’m busy “leveling up.” I’m fighting lots of easy enemies before I go on to fight the “boss”. I’m paying off my student loans as quickly as possible,… Read more »

James
James
9 years ago

There is nothing wrong with spending money on Timbers season tickets.

Now if you were spending $1500 on Chivas USA or NY Red Bulls tickets……….

saro
saro
9 years ago
Reply to  James

James, I’d like to take this moment and thank you for your soccer smack talk.

– a DC United fan

Mike Hunt
Mike Hunt
9 years ago

I agree with Jan. Spending is creating wealth for someone else so there should be no guilt associated with it. In fact, one could argue that spending and ‘charity’ aren’t too different, just different means to achieve the same goal. By that line of thinking saving would equate to hoarding and should be used for your future self and / or family. Saving without spending could be selfish. For example imagine having tons of gold buried in your yard that only you know about but you are too miserly to spend and then you die. The gold stays buried, nobody… Read more »

barnetto
barnetto
9 years ago
Reply to  Mike Hunt

I disagree on two points. Spending and charity are not different means to achieve the same goal because they’re aimed at different segments of the population (generally). To me, charity comes in two forms. 1) give a man a fish, 2) teach a man to fish. Whereas spending is 3) buying the fish from the man that already knows how to fish. I think there has to be a balance between the three, but I haven’t got a formula for finding that balance. You need to give the man fish while he’s learning to fish, and then you need to… Read more »

Mike Hunt
Mike Hunt
9 years ago
Reply to  barnetto

Good points- I like your 3 classifications.

Saving if put in the mattress (true definition of saving.. not investing) doesn’t help the economy until it is used for investing. Do you agree with that?

Julia
Julia
9 years ago
Reply to  Mike Hunt

How about this? Hiding money in mattresses and burying it in the yard most certainly does not help the economy. Until you dig it up and spend it.

“Saving” it in the bank, so the bank can lend it out to others, does help the economy.

“Investing” it in the stock market, so that companies have more capital to invest, also helps.

James
James
9 years ago
Reply to  barnetto

If the fisherman buys a bigger boat, is he being selfish? Shouldn’t he just give the money to a fishermen who doesn’t have a boat? And if a fisherman without a boat get the money, should he give it to another one who doesn’t have a net or a pole? It can keep going this way forever. At what point would it be okay for the fishermen to have a fleet of boats? Or should we just have a bunch of people with a line and a hook each making just enough to get by?

John
John
9 years ago
Reply to  James

Except that those other fishermen may be better off by working for the man with a fleet of boats rather than undertaking the risk of owning their own boat. Some people prefer security to potential economic gain.

J.D. Roth
J.D. Roth
9 years ago
Reply to  barnetto

I really like your three points too, Barnetto. Great comment!

Pamela
Pamela
9 years ago
Reply to  barnetto

Lots of great points here. But investment doesn’t always benefit everyone equally. That’s why the U.S. passed the Community Reinvestment Act–banks were accepting deposits in poor neighborhoods but were taking the money out of the community and not lending it locally.

I think it’s important to wrestle with the personal implications of our actions, but it’s not going to mean much if we don’t have equitable laws that are fair to everyone.

james l
james l
9 years ago
Reply to  Pamela

that worked well, it was the cause of sub prime loans. If the bank was paying interest to the depositors, then these communities where actually saving and gain wealth through others mortgage payments. Instead the government encouraged these poorer people to take loans out that they could never afford to payback.

Andrew
Andrew
9 years ago

As long as one makes his or her money honestly and fairly, then no one else should get to decide what he or she does with it. Spending money does not make one “bad” or immoral. In fact, if people stopped spending money, including on luxury items, the world economies would crumble. Personal consumption is estimated to be around 65%-70% of the US GDP. Take away even a small portion of that and, pretty soon, there would be a lot more people needing the assistance that many of you on this site seem to think the needy are entitled to.… Read more »

barnetto
barnetto
9 years ago
Reply to  Andrew

What is honestly and fairly?

Did Prince William come by his money honestly and fairly?

How about a person born in an upper income US family whose parents sent him/her to the best private schools, had private tutors, went to the parent’s ivy league alma mater and then got a job at Dad’s law firm?

The person born in the US to an average family, with public education?

The kid born in Afghanistan who becomes a poppy plant farmer?

The kid born in Africa whose parents died of aids and is now living in an orphanage?

LC
LC
9 years ago
Reply to  barnetto

Does it matter? We are all given a set of circumstances and opportunities in which to operate. It’s up to us to determine what we do with them, whether we take advantage of them or not. I’ve seen many of these so-called privilege kids who had the money, schooling, etc, who took advantage of these opportunities and worked extremely hard to be successful. Should they be denigrated because they were born into a better situation than another? If so, every person in America and many parts of Europe have been born into significantly more privilege than those in say Africa.… Read more »

Andrew
Andrew
9 years ago
Reply to  LC

Exactly. Your life is what you make of it. Are some people born into more favorable situations than others? Of course. That will always be the case. If we “started over” and made everyone equal, it would not last, and we would get back to the same class system within a couple of generations. It’s human nature. If helping people is what you want to do with your money, then by all means do it. But the only moral obligation we have is to ourselves. “My philosophy, in essence, is the concept of man as a heroic being, with his… Read more »

Patti
Patti
9 years ago
Reply to  LC

I could not disagree more with Andrew Comment 87. While individual differences exist, these differences alone do not explain the inequalities and disparities in the world. People live and experience the world not just as individuals, but also in families, in communities, in nations, where larger systems (capitialism, democracy) affect the choices they have every day and where their histories affect the present. I disagree with the notion that “But the only moral obligation we have is to ourselves.” Instead I believe that we are responsible to each other and for each other. Morality is involved in all the decisions… Read more »

Julia
Julia
9 years ago
Reply to  LC

Interesting, Patti, I disagree with both you and Andrew 😉 Absolutely I disagree that the only moral obligation we have is to ourselves. I think the only SOCIAL obligation we have is to ourselves…only we can decide for ourselves if we want to get off of welfare, or make a promotion at work, or save the extra money from that promotion instead of going into debt, and so on. However MORALLY we have an obligation to everyone we come in contact with not to, say, steal from them. I also disagree that morality is involved in all the decisions we… Read more »

Pamela
Pamela
9 years ago
Reply to  Andrew

Don’t forget that the GDP is not set in stone. I remember when we switched from measuring GNP to GDP when I was in high school. One of the significant changes was that we started counting as economic benefits things like clean up of pollution–as if the clean up was a benefit that wiped out the damage created.

We don’t have to use GDP as our measure of success. And then, all these arguments about personal spending would be moot.

CB
CB
9 years ago

What a thought provoking and far-reaching question! I think, as someone above said, the question of “how much” is the wrong question. It’s more about attitude: “how much are you willing to give away?” (As a disclaimer I’m not preaching from a soapbox looking down. I’m in the crowd looking up at this person I don’t recognize telling me to change my attitude about giving.) You brought up the point about the church and Jesus. Based on what I’ve read in the Bible, particularly in the New Testament since we’re talking about Jesus, Jesus didn’t seem to care about how… Read more »

LC
LC
9 years ago
Reply to  CB

“Think about this: Is the $200 million yacht excessive because it’s a $200 million yacht or is it excessive because you don’t have and can’t fathom having $200 million at your disposal?” Well said. My thoughts exactly. I’ve seen the Coach bag example on here a couple times in the comments… not sure why, of all the “luxury” brands one could name, this rather moderate one by comparison is brought up, but is a $400 bag obscene because you can’t afford it? Is it because you wouldn’t spend your $400 that way? I could say that the $1500 ticket purchase… Read more »

Patti
Patti
9 years ago
Reply to  LC

LC–

I think the question of the Coach bag is a really good one. My friend used to use the question, if you were really wealthy, how much would you pay for a white t-shirt? as a way of getting at the same issue.

Mom of five
Mom of five
9 years ago
Reply to  CB

Once you hit the AMT, the amount that is deductible for charitable giving is minimal. People like Warren Buffett and Bill Gates can reap more tax benefits by forming charitable foundations, but for the vast majority of folks with an AGI>$250k who are not super wealthy, tax deductions for charitable contributions are pretty meaningless.

Catherine
Catherine
9 years ago
Reply to  CB

My wise friend Judy from church says that to be truly meaningful, charitable giving has to hurt — the $1500 you give to charity means you won’t be able to buy those sports tickets. That is what the rich young man could not do and the poor woman could — he could not deny himself for the sake of others. Much as I applaud Gates and Buffett for their charitable giving, I doubt it makes much difference in the quality of their daily lives, though of course the same cannot be said of their heirs. Another point, giving money is… Read more »

Mike B.
Mike B.
9 years ago
Reply to  Catherine

A good thought, but even the “hurt” is transient. When I got my first job, we set a percentage to give away. As my income has increased, so has this percentage.

Does it hurt? Not really — because I’ve never had that money.

Kate
Kate
9 years ago

I believe money gained by a person through legal enterprise is theirs to do with as they see fit. Consumption is not entirely negative. It’s a slippery slope when you start judging others actions with some “holier than thou” attitude. (“I find it morally wrong – because I know these people” seen above in #7) Really? You know everything about them and their finances? Wants and Needs are so relative in America compared to third world countries. Who says you actually need as much food as you eat? Someone else gets by on less, so your excess above that level… Read more »

anonymous
anonymous
9 years ago
Reply to  Kate

kate, to clarify, it sounds like you’re advocating for moral relativism here: don’t judge others, period*. is that right?

*except you do say “it is wrong to judge others…”–i guess this means everything’s potentially okay, except judgment…

anonymous
anonymous
9 years ago
Reply to  Nicole

ha ha. thank you.

Kate
Kate
9 years ago
Reply to  anonymous

I’m not advocating no judgement period. People judge, period. I’m advocating not thinking yourself better for “sacrificing” a vacation to give to charity than another person who chose the vacation instead. Make a personal decision that YOU can live with regarding YOUR money and let me manage my own. This stemmed mostly from 7s response about judging others as morally wrong because she didn’t think they gave enough/any time/money. The implication is that the other people should live their life by her standards and are somehow less because they don’t. If I’m not hungry, I’m not going to purchase food… Read more »

anonymous
anonymous
9 years ago

I can’t overstate how much I’ve wrestled with this question in my life (i.e., in therapy, in my career choices, and where I live). I’m extremely familiar with Singer’s works. Every decision to do something is a decision not to do something else. There are *always* tradeoffs. The decision not to acknowledge these tradeoffs is closely linked to the idea of existential bad faith: by pretending we don’t have choices, we deny our freedom. Life can be much more convenient this way! People’s answers to this question will differ because they have (1) different models of how the world works… Read more »

anonymous
anonymous
9 years ago
Reply to  anonymous

Following up for the last time: Regarding the question of what we should focus our ‘altruistic spending’ on (e.g., national parks, access to contraception, clean water, political reform, etc.), J.D., you might be interested in examining more closely the activities of GiveWell. They’re trying to apply theory from a very large academic field that attempts to convert interventions into quality-adjusted life years (QALYs). Maximizing the number of QALYs added by an intervention is the goal of many charities. Of course, it’s easier to do this for simple linear relationships–when we’re trying to prevent fisheries’ collapses, eradicate entire diseases, or precipitate… Read more »

tas
tas
9 years ago

Doesn’t some of the issue with consumption depend on how people are employed? To take Jan’s example of that yacht, if people are paid fair, living wages, then sure the yacht is something that productively participates in society. But if the workers on that yacht are paid only minimum wage and have no benefits, is that still the case? (I’m assuming they work full time; or if part time, it’s not to cut costs but bc the boat is only used part time.) Perhaps one way to balance these issues is to spend our money consciously on items through which… Read more »

shash
shash
9 years ago

What?!? No cat picture? But, I thought we were on a roll these last few days. (sigh)

Meghan
Meghan
9 years ago

Interesting debate and one that I don’t have an answer to, but I’ll add my two cents. I try not to think about “giving back” in the narrow sense of giving money to charity. When you spend $1500 for season tickets for the Portland Timbers, you are supporting athletes who are passionate about what they do, often have short careers, and who probably do not make a lot of money. Same goes for when you buy tickets for the symphony or the theatre. You are supporting local artists who devote many hours to their field and generally have an income… Read more »

dude
dude
9 years ago

I think Marsha makes a very good point — it’s one thing to self-examine and another to pass judgments on others. We all make choices about what makes us happy and the answer to that question is different for all of us. I know I need to restrain myself from judging those who value luxury items like fancy purses, when my ‘cheap chic’ knockoff serves me just fine — and doesn’t prompt guilt when I get ballpoint ink stains on it. But after taking several international flights last year, I’ve got a carbon footprint about the size of Maine, so… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago

What are my moral obligations? To make the world a better place? It’s better even if it’s just for me. To make the world a more equal place? Equal for who? For everyone, or just for me and a people in a specific group (i.e., people with muscular dystrophy, or people in a particularly downtrodden country)? Something else? If I have none of these obligations, then I am not being immoral by neglecting them. What’s the real question? Certainly a $200,000,000 yacht feeds fewer people than a $200,000,000 farm, but who says I’m supposed to feed other people? What are… Read more »

Betsy
Betsy
9 years ago

Re: the moderately poor giving to the even more poor — see under “Mite, widow’s”.

Dan
Dan
9 years ago

I used to make my living pumping jet fuel for corporate (aka rich people’s) jets. Along the same lines as the yacht, there are many working stiffs who just get by supporting the industry. Political/media attacks on the industry used to drive me nuts because the side affects of making it un-pc to have your own jet impact a lot of people.

mlb
mlb
9 years ago

Tyler, it seems to me you are introducing all of these questions which suggest that morality runs along more of a continuum, and then you conclude that it black & white / binary. I’m not sure how you came to this conclusion. To me it seems you are saying you have no legal obligation to help less fortunate people, and as a result you have no moral obligation to do so.

I do think morality is highly personal, so some people don’t feel morally obligated to help anybody less fortunate. However, I don’t think that’s most people here.

Adam
Adam
9 years ago

As a current seminary student in the ELCA church, this is a question my wife and I have struggled with. On one level I am a full time student and am paying off debt. On another end we love to travel. How we currently deal with this dilema is that we have decided to donate to those organizations that help deal with something that angers us – the sex slave trade in the U.S. It boils our blood that this goes on. I would suggest that readers find something that boils their blood: animal abuse, homeless children, etc. Then set… Read more »

Betsy
Betsy
9 years ago
Reply to  Adam

To Adam the seminary student — I love the “find something that makes your blood boil” notion. What a great way to immunize your will and your budget against the non-stop selfish consumerist messages we are all confronted with.

I guess it’s called righteous anger and that’s a way to channel it.

Danielle
Danielle
9 years ago
Reply to  Betsy

“Find something that makes your blood boil,” and then research the heck out of it before donating your time/money.

Just be aware that charities and non-profits use similar PR and advertising tactics to companies to tap into our emotions.

I encourage anyone whose “blood is boiling” about a perceived social ill to really research the issue from multiple sides and heavily vet any organization you’re considering donating to.

It may make you feel better to give, but doing so in a thoughtful, considered way will have the best impact.

anonymous
anonymous
9 years ago

[I’m following up on the comment I made earlier (#16).]

A lot of people seem to be interpreting the “pro-charity” stance as an attack on free markets. One can interpret charity, for example, as buying the slightly more expensive version of something to alleviate harm uncorrected in current markets–the organic fruit, the free-trade coffee, carbon offset credits, the recycled/reclaimed furniture. Other items (e.g., education, certain kinds of health care) need a more direct subsidy. Arguing that charitable donations dissolve markets is an overstatement, a straw man.

Lucy
Lucy
9 years ago

To some I suppose that I would appear to be selfish with my money. I tithe all income to causes I support but I do not go above that 10% mark ever. I prefer to save my money for myself so that I will be able to own a home outright and provide good education for my children all the way through college. Am I somehow less of a good person because I prefer to invest in my own community and family? Personally, I don’t think so. We don’t need people who can give 20 billion to AIDS in Africa… Read more »

Savoholic
Savoholic
9 years ago

I’ve always thought this was an odd observation. Though I choose a fairly austere lifestyle, I don’t begrudge those who can afford luxuries. People act as though the money spent on these items is put on a big bonfire and destroyed. It takes chain of labor and materials to create yachts and buildings. What are all of the people down the line spending that money on? I think the key is to make mindful decisions about your money. Is the product skillfully made from quality materials? Does the producing company or individual align with your values? Will you truly enjoy,… Read more »

Betsy
Betsy
9 years ago

I am so glad you brought up this topic on GRS. It’s great to see how many other people are, like me, wrestling with it and trying to do right. We don’t hear about this much in our consumer-based economy and society, outside of church and maybe giving circles. There aren’t many ads urging us to be charitable (at least, not in comparison to the prime-time stuff urging us to spend to make ourselves happy in some way). After half a lifetime of plenty of self-denial and extreme thrift, I’ve found in mid-life that I’m substantially happier and more pleasant… Read more »

J.D. Roth
J.D. Roth
9 years ago

Thanks for the great discussion so far, everyone. I appreciate the thoughtful comments.

As every morning, I’m about to head to the gym for a couple of hours. Because the spamfilter is overzealous lately, that means some comments are going to get trapped in limbo until I return. After my workout, I’ll fish everything out and make sure the real comments are being published. Please be patient if your comment doesn’t appear right away.

Elizabeth
Elizabeth
9 years ago

I’ve always found it interesting that various religions practice giving not just as a way to support others, but as spiritual cleansing. I’m not Muslim, but I find the practice of Zakat interesting — each year, people have to give 1/40 of their accumulated wealth. It’s quite different from tithing because it’s not based on income, but on assets and savings as well. (Basic expenses like a modest home and car I think don’t count — but I’m not 100% sure). The point is that there is nothing immoral about having wealth (gained through honest means, of course), but there… Read more »

anonymous
anonymous
9 years ago
Reply to  Elizabeth

It’s so arbitrary, though. How can you trust someone else to tell you that 1/10 or 1/40 is “enough”? Clearly, 1/10 to someone making $20,000 is a big deal; for someone making $200,000, it’s a joke. Contributions should be progressive.

Kevin @ Thousandaire.com
Kevin @ Thousandaire.com
9 years ago

Personal finance is personal. If you can live with yourself based on the donations you’ve made, then you’re in the clear. The only right or wrong answer will come from you and/or your God.

MutantSuperModel
MutantSuperModel
9 years ago

Eek I really dislike these kinds of questions because they’re sort of… pointless. Morality on this level is so individual. There is no specific right or wrong answer to her question because you can’t please everyone. The right answer is to do that which lets you sleep at night. We have to figure that out on our own. I hate passing judgment on people because of items they purchase. That seems extremely superficial, shallow, and rash. You’re making a judgment of a person based on one singular thing without taking the rest into account. That’s unfair. Sure he bought a… Read more »

anonymous
anonymous
9 years ago

I don’t see how it’s so personal or private. These kinds of decisions are at the foundation of our governments, laws, and tax policies.

anonymous
anonymous
9 years ago
Reply to  anonymous

Taxes are a systematic means of redistributing wealth, which is different from charity. How one chooses to give their own, after-tax income is, in fact, a very subjective and personal point. What happened to the mantra “do what’s right for you”?

mlb
mlb
9 years ago
Reply to  anonymous

They are not the same thing, but they are similar. Paying taxes is legally enforced and charitable giving is voluntary… but in a sense they are both redistributions of wealth from the more to the less fortunate (at least to the extent that the government spends tax revenue on the poor).

mlb
mlb
9 years ago

I definitely disagree that this kind of question is pointless. Yes morality is different for everyone but it’s not like you decide on one morality and then it stays the same forever… our morality can be influenced by the opinions and ideas of others.

Dan
Dan
9 years ago

Years ago, for my college English placement essay, I was asked to read a prompt by some economist that suggested that by buying a new TV, you were responsible for the death of children in Africa, because that $1000 could buy them food and medicine. He went on to give the hypothetical scenario that “Bob” had a Bugatti (an extremely valuable car) and it is basically his retirement fund. It’s worth over a million dollars. He goes out for a walk and parks it on some old, unused rail road tracks. While on a walk, he sees that a child… Read more »

Dan
Dan
9 years ago

Not fair to judge someone like Steven Speilberg who has donated millions upon millions to charitable foundations around the world. Is a $200 million dollar yacht excessive? Of course it is, but this man has not made his wealth by betting mortgages will fail or jacking up oil prices. He has made entertainment for people around the world for years, and he is one of the best at it. He is not a fortune heir, he is self-made and he should be able to do as he pleases with his money. He has created more jobs and given more money… Read more »

louisa @ TheReallyGoodLife
louisa @ TheReallyGoodLife
9 years ago

As a number of people have said, buying stuff does allow other people to make a living and I think that’s great — but care is obviously needed to make sure that the item is genuinely providing people with a good living, and not a survival level living for the manufacturers and a $200million yacht for someone else. (Or the money is disappearing from the local economy through a tax loophole.)

I don’t give away anything as much as I could but I try to make the most ethical choice with everything I do buy.

J.R.C.
J.R.C.
9 years ago

I heard a great talk (fair warning it is a sermon from a pastor of a non-denomenational church, but it’s really good regardless of your views on god/religion/christianity) about how to deal with giving to others and wealth disparity, etc. http://www.northpoint.org/messages/one-not-everyone The gist of it is that you, a non-billionare, might not be able to solve world hunger… but you can feed one person. So the rule of thumb becomes do for one what you wish you could do for everyone. As you get more, increase from one person helped to two people helped… when you get a billion dollars,… Read more »

Dean
Dean
9 years ago

I appreciate the perspective found in Mark 12:41-44. It’s easy to look around and form opinions about what’s excessive and how people should handle their money, but ultimately what we should be more concerned about is what we can control – ourselves. One commentary I read on the passage in Mark suggests it’s not so much about how much was given, but how much was held back. To me this comes down to our own attitude, generosity and the motivation behind giving. There will always be inequities in the world, and even if I can’t match dollars with Buffet or… Read more »

Adam P
Adam P
9 years ago

Interesting discussion. There will be no right answer of course. I give to Care Canada, because it helps poor people the world over in a non-secular way (I don’t think drinking water should come with a side of Bibles) and the local Humane Soceity (because I can’t stand to see cats and dogs suffer). I certainly don’t give as much as I should by my own judgement, and that is all that matters. In my ideal world, we’d all start with a level playing field. We are all born innocent, and not by our own choice, therefore we should all… Read more »

anonymous
anonymous
9 years ago
Reply to  Adam P

Phew, glad there’s another Rawlsian here!

Adam P
Adam P
9 years ago
Reply to  anonymous

I had to look it up but I guess that’s what I am. Shucks! I’m not original thinker 🙂

Dan
Dan
9 years ago

Thanks for the post JD. I’m going to start this by saying I don’t place much value in donating to charity, at least at this point in my life. I grew up lower-middle class (my mom gets mad if I say “poor” because we had all the basics. But we had none of the luxuries.) Since I was a kid, I was bound and determined to provide a better economic life for myself. I came out of grad school with a good chunk of debt that will take me awhile to pay off. Even buying a small house or decent… Read more »

Meghan
Meghan
9 years ago
Reply to  Dan

“BTW, I go back and forth on this, but when I read about people who go to the food pantry and have 40+ hour/week jobs, I have to wonder why they bore children they can’t afford to support. I don’t feel compelled to pay for their mistakes.” Ouch, harsh. Did you ever stop to think that perhaps some of those people had kids when times were better and they could afford them, but job loss, illness, medical bills or some other type of emergency led to their current situation? Very narrow view of people who are poor or struggling financially… Read more »

Amanda
Amanda
9 years ago
Reply to  Meghan

It’s a good question though. When my friend complains about anything related to her finances or the difficulty of raising her child I have to fight the urge to tell her she made a bad choice to have a child when they’re in debt in the first place. But that’s a whole different topic.

Kim
Kim
9 years ago
Reply to  Dan

“BTW, I go back and forth on this, but when I read about people who go to the food pantry and have 40+ hour/week jobs, I have to wonder why they bore children they can’t afford to support. I don’t feel compelled to pay for their mistakes.” Dan, I agree with a previous commenter that you are taking an overly narrow view of these hypothetical people. Should our society be constructed in a way that people cannot feed their children while working 40+ hours a week? I grew up middle-class in Canada, which has much cheaper university tuition fees than… Read more »

kitty
kitty
9 years ago

The better question is, how can we remove guilt from the money question?

Katy @ The Non-Consumer Advocate
Katy @ The Non-Consumer Advocate
9 years ago

If you think about it, charitable giving is about helping someone else to live a healthy, fulfilling and happy life. If you deprive yourself to the point where your own happiness is hindered then you have actually done a disservice.

The key is to figure out how you can care for yourself and your family while still helping others.

Katy Wolk-Stanley
“Use it up, wear it out, make it do or do without”

anonymous
anonymous
9 years ago

I totally agree. It’s *very* hard to know where the line is, though. I’m going to have a smaller family than I otherwise would and am in a slightly different career than I otherwise would be because I want to help others better. I’m happy with these decisions, but if I’m not careful, I can slide into constant self-denial and asceticism. I do wish it were easier to get on in this society without consuming so much, though. Weddings can make me wince…

Connie
Connie
9 years ago

I have been a GRS reader for awhile but have never commented. This is a great topic, one that rarely gets discussed on the perosnal finance websites. I just want to add a thought. There seems to be an underlying assumption that money given to a charity just goes down a black hole and does not feed back into the larger economy. However, giving to a charity not only helps the intended beneficiaries but through their spending, the money is fed back into the economy and supports jobs, etc. For instance, assistance given to the poor helps them pay their… Read more »

Chris B. Behrens
Chris B. Behrens
9 years ago

$200 million is expensive, even for a yacht. Here’s the thing – I’ll bet it’s a hell of a yacht. I’ll bet that a lot of woodworkers spent a lot of time creating beautiful cabinets, a lot of stoneworkers spent a lot of time creating countertops and floors, and a lot of engineers spending a lot of time to create an incredibly boat. All of these people were probably low middle to high middle class artisans. One of the consequences of attacking high-end luxury production is that you’re essentially protesting the creation of art. And I think that’s the real… Read more »

Barb
Barb
9 years ago

It’s difficult for me to suggest how others spend their money. I believe that I have a moral boligation to help level the playing field (both abroad and in this country) and will also do so. I do remember your previous comment JD, about throwing money at problems. I would usggest that there are more than a few problems in the world where money is part of the need and that simply cannot be avoided. As for your church and Mercy example, my questions is this. How much more, if any, did those expenditures allow them to serve the poor.… Read more »

Amanda
Amanda
9 years ago
Reply to  Barb

The building is really the same as a coach bag on a larger scale IMHO. A new, large, quality building that provides necessities for the organization doesn’t seem immoral. To me it’s that the $37 mil could seem ostentatious, overboard and immoral.

Kris
Kris
9 years ago

Very thought provoking discussion! To me, this is a very individual issue – each person has to do what is right for them. Do I are that Spielberg bought a $200 million yacht? Nope – his money to do what he wants. When my husband and I work on our family budgets, we include a line item for donations, which we then give to the organizations we choose to support. It is an expense like any other, including housing, savings, etc. If we want to give more during the year outside our regular amounts, then it comes out of our… Read more »

kate h
kate h
9 years ago

As I rose out of debt I struggled with this question (like many of us). I spent time thinking about aligning my spending with my values (overall). I decided that giving to others was a value of mine and like any other budget line I put a number on it – 10% of my take home pay. Then I worked through where the money was going to go. Overall I decided that one of my biggest values is education. Education is what separates me from many people who are struggling financially. I give some money every month to my grandmother… Read more »

Anna
Anna
9 years ago

What I wonder is what change did Buffet’s $37 mil and Gates’s $30 mil make? That’s not chump change! If $67 mil couldn’t solve a few problems somewhere then how will my couple hundred make a difference? If charities do not create a sustainable living environment for people and only provide for their daily needs then any amount of money they recieve will never be enough. That’s why Heifer International is one of my favorite charities. I allows the recipient a way to provide for themselves and to also pay it forward. I think it would be nice that when… Read more »

El
El
9 years ago
Reply to  Anna

When you start trying to determine the relative utility of your charitable choices, you’ve gone down the rabbit hole. I will never know whether the best use of my $100 is giving it to the United Way, to the local animal shelter or to hand it to the guy who just asked me for two bucks. Maybe he’ll buy food for his family or maybe he’ll spend it on drugs. Maybe the animal shelter will spend it on veterinery care, ot maybe it’ll go to inflated administrative costs. Since I can’t know for sure, my tactic is to do my… Read more »

anonymous
anonymous
9 years ago
Reply to  El

It’s not a rabbit hole. Check out GiveWell. (I don’t work with/for them, for what it’s worth.)

Rachel Jean
Rachel Jean
9 years ago

I really liked this question. I work at a nonprofit, and one day I was reading an article about a popular musician’s annual salary. I did the math, and it would’ve funded our organization for the next 50 years! It was unbelievable! I couldn’t imagine what someone could possibly do with that kind of money, but this particular person wasn’t known as a philanthropist. I think people with modest wealth have an intense opportunity to impact change. You can do it by choosing where you buy (do your shoes come from a sweatshop/does the store pay liveable wages to its… Read more »

Nathan Robertson
Nathan Robertson
9 years ago

Free trade creates wealth. Buy all of what you will, you are helping someone, somewhere, buy trading your goods for their labor.

Geek
Geek
9 years ago

For me this argument has about as much meaning as “if you have a baby instead of adopting, you are depriving a child of a loving home”. It’s your money, and you can do what you want with it. One should not do “good” to feel superior. http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=4078 The charity with the big building, Mercy Corps, has costs well under control. In order to recruit excellent charity executives and employees, it helps to have a nice building. And please, no one suggest that employees of a charity since they’re so virtuous, should work in a shack. It’s hard enough to… Read more »

Ru
Ru
9 years ago
Reply to  Geek

Ah, but if you have a baby, you ARE contributing to overpopulation.

Is it really much better than buying a puppy from a puppy mill instead of getting one from the shelter?

Geek
Geek
9 years ago
Reply to  Ru

That’s what I’m saying – it’s a pointless argument. They’re all essentially the same argument. Anything you do for you, you aren’t doing for someone else.

William
William
9 years ago

Looks like I’m a bit late to a remarkable discussion. To some extent, it seems to be depend on what wealth is. Is it obtained by generating wealth and goods for others? Is it done by cheating at the game? Theoretically, every transaction benefits both parties. That’s standard 20th century economics. When that fails — and it often does — one party has taken advantage of the other. Worse than that, there’s some evidence that our internal desire for equity is no worse than a 30/70 split — ie, if you benefit double what I do, then I am likely… Read more »

Kevin
Kevin
9 years ago

So many of the comments here seem to be dwelling on how one donates their money. The topic is how one spends their money. In my opinion, capitalism (as it so often does) holds the answer here. I totally agree with everything Tyler said, but to add to his argument, I’d point out that if shipbuilders are underpaying their employees, then the employees would quit and go find a better job. Consequently, the shipbuilders would have to offer more money to their workers in order to recruit a workforce to meet the demand. The price of the product would go… Read more »

kate h
kate h
9 years ago
Reply to  Kevin

I would argue that the distinction between donate and spend is incorrect. Giving to a charity is a form of consumption, just as buying a movie ticket is. The moral dilemma, if there is one, is whether it is better to spend more of (or all of) your disposable income on charity than it is on entertainment, luxury goods or on any other non-life sustaining purchase. For me, it boils down to how much of my prosperity/income do I think I should be spending on other people/the community/ causes. Once the amount is chosen then I decide where it goes… Read more »

Rosa
Rosa
9 years ago
Reply to  Kevin

Don’t know about shipbuilding, but in a lot of industries if the workers feel they are underpaid, they get chained to their sewing machines, or locked into the factory, or targeted by paramilitary militias. Or the employer goes out and hires or buys some children to do the work. Even here in the US a number of industries rely on prisoners, illegal immigrants (who can be reported to authorities who will imprison or deport them if they speak up or try to leave) or in a recently-uncovered case near here, mentally disabled people who were housed in squalor and didn’t… Read more »

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