Charity and Early Retirement – Does Giving Money Make Sense?

Around this time of year I am passively berated by charities everywhere I go (I’m guessing most people are), the food bank requesting donations for families to have a nice Christmas dinner (which I am all for); The United Way asking for payroll-deductions that would go to various charities; and the almost nightly calls from telemarketers asking for money.  Maybe the constant exposure to people asking for money has put me on edge, but it has also made me think about charities and my budget.

I am not a regular giver to charity.  In the past, I have given money to several, including the Shriners, Canadian Cancer Society, Heart and Stroke Foundation and other minor organizations.  I understand the concept of giving to charities – helping people and organizations achieve goals that they would not be able to attain without money provided by donors, but on the other hand when looking at an early retirement financial plan it doesn’t entirely make sense.  On a daily basis, I think about each and every purchase that I make, whether I should be wasting $1.26 on a muffin when I could have baked a batch of them for $3, to the best way to save on heating and cooling in the house.  The thought of just giving away money is essentially alien to the budget and goals that I have set up for my financial future, but in the past I have continued to give.

I understand that giving to charity is a good thing – providing for others that are unable to provide for themselves.  I just don’t feel attached to any cause.  I have never used a charity, nor have any of my friends or acquaintances and I just don’t know when I would, but generally I think that’s how everyone feels until the day comes when they need to approach a charity for assistance – I just can’t imagine the circumstance.

So, in the next year, I’ve decided that rather then give money to charity I’ll give time (call it a New Year’s Resolution).  Time is something that I have enough of to give and donating it to a charitable organization would have a two-fold impact:

Allow me to better understand a specific organization:  This understanding would perhaps allow me to understand the importance of the charity, as I am basically a newbie in what they do and how they do it.

Allow me to donate without impacting my budget: I have time, I waste a lot of it doing things that are not productive to myself or others.  What I don’t have is excess money kicking around, and as you may surmise from my muffin decision, I would fret a lot less about giving up a couple hours here and there then just giving away money that I so carefully oversee for the most part of my life.

Does anyone else have plans to donate time or money to charity?  Are donations a regular part of  your budget?

15 thoughts on “Charity and Early Retirement – Does Giving Money Make Sense?”

  1. I’m in a similar boat with Dave. I don’t give much cash to charity in a year. I rather like the idea of giving some time to support the charity instead.

    Actually a desire to do public service is partly what drove me to run for the school board. I just found a way to do it and still get paid (granted given the time I’ve put in lately I don’t get paid that much).


  2. I do some volunteer work in my retirement (and when I was semi-retired). It costs me time (which I have plenty) and some minor expenses such as gasoline.

    Another way to help a charity is to donate noncash items. I donate old clothes to a local charity when I have them available to donate. I once donated a sofa I had no further use for to charity.

    As for cash, I donate a few bucks to my alma mater’s alumni fund, my local fire department, and a non-profit political organization, all of which are tax-deductible. And a few bucks to my local congresswoman (not tax-deductible).

  3. We have just recently started to attempt to give more consciously. In the past, we would give when the occasion arose…ie. $20 to a Heart and Stroke canvasser at the door;$50 to a friend doing the Run for the Cure or the MS Walk, etc. At the end of the year I had almost always misplaced receipts and/or failed to collect them in the first place. Over the past year we decided to choose a few charities and make a specific point of donating a more significant amount–then we forgo the rest of the requests.

    We have always donated plenty of our time…my husband to coaching and managing sports teams and myself to volunteering in the kids classrooms and through Girl Guides. Last week my Brownie pack worked on their Christmas ‘service projects’…decorating bags and filling with soap, toothbrush, washcloths, etc. to be donated to a local homeless shelter.

    I think giving of your time/talents is often more valuable to charitable organizations than writing a cheque. Good luck finding the charity that you can really get behind…I suspect you will find it really rewarding! It really is true that you often get more out of it than you give!


  4. Well Dave, I’m not sure how old you are but I’m middle-aged and I’ve seen my share of “life”. People don’t necessarily have to need the assistance of a charity to be “attached” to it. There are many charities that fund research that benefits society as a whole and may one day benefit you – charities that fund medical research into illnesses like cancer, heart disease, MS, etc.

    Whether such charities are efficient with donated money …, well that’s a discussion for another day.

  5. @ ldk – Sounds like some worthwhile organizations you and your spouse are helping out!.

    @ Mark – Maybe attached is the wrong word, but I can’t see myself assisting an organization in the off-chance that myself or my loved ones may require their services. Also, as you noted, I am skeptical of charities use of funds – I realize that the organizations probably use donations to the best of their abilities, but there seems to be a lot of waste going on and sometimes successes are few and far between (at least in the case of large medical research breakthroughs that the public is aware of).

  6. My personal answer has been microfinancing. It makes me feel like I am assisting creation of sustainable processes, rather than one-time relief.

    Especially when they tell you that $xx buys a certain amount of seeds or provides a start-up loan for a certain period of time.

  7. We finally took the plunge and sponsored a child. This is a long term commitment but a lot more systematic than the charities we have supported to date. This is basically the wife’s interest and I like IngaG’s idea about startup loans, and I will follow that path.

    We retire in 41/2 years and knowing ahead of time the expenses of the charity I can plan better. Living in a small town doesn’t provide the opportunities to volunteer so we do the next best thing.

  8. The simple fact that we can consider early retirement indicates that we are amongst the wealthiest people the planet has ever seen. I, for one, could never sit back in my comfortable life and do nothing to aid those who are dying or destitute because of illness, poverty, despotism, civil strife, etc. Even small amounts of money can make huge differences, as IngaG points out.

    Find a charity that makes financial responsibility as significant a part of its remit as you do in your own life, and share your fortune. Time is hugely valuable, but money is also essential.

    Besides, even if you struggle with altruism, helping others tends to make you feel good 🙂

  9. Dave, I think you and I have differing perspectives on what constitutes “charity” . I don’t believe that charitable giving should be approached as an investment or insurance that may one day return a benefit to oneself.

  10. I agree that giving your time can be just as helpful as giving money. It has the added benefit of allowing you to understand the needs of the people you are working to help.

    Donating money has two benefits that haven’t been mentioned. First, the only way to be rich is to have more money than you need (either by having more or by needing less). Donating to others is an exercise in not “needing” your money, or being rich. Second, the more you donate, the less you spend on yourself. Financial independence (retirement) occurs when investment income increases to meet your spending (which falls as you donate).

    I have to agree with Nerode that we, in Canada, are among the wealthiest people in the world. I also believe that what goes around, comes around.

  11. @ Mark/Scott – Maybe I misunderstood your statement “There are many charities that fund research that benefits society as a whole and may one day benefit you – charities that fund medical research into illnesses like cancer, heart disease, MS, etc.” I took that to mean that you thought I should be donating to these charities as a hedge towards my own usage at some future date.

    I understand what these charities do. Looking at the Canadian Cancer Society and Heart and Stroke foundation annual reports that these 2 organizations by themselves brought in $203 and $142 million in the 2008/2009 years – These numbers are huge and maybe that’s where the disconnect is – even if I gave my entire salary to one of these organizations, is there really going to be a result that would change the world? This may be a naive way to look at these organizations, but really if they can’t fix whatever is wrong with $200 million coming in per year, am I going to put them over the edge.

    In the end, I don’t want to minimize anyone’s giving to these or any organization and maybe I don’t understand them enough to have an opinion on them, but given my current budget priorities I think giving my time is better for me then giving money.

    @ Nerode – There was no such thing as retirement until 50-75 years ago, people just worked until they died (average life expectancy of a male in 1951 was ~67 years old). Perhaps in another 20 years, everyone will be done working when they’re 45 🙂

    I would love to end despotism, poverty and illness worldwide, but we’ve also been trying to fix that since, well probably forever. Again I’m not sure what I’m going to be able to do to fix that – it’s not really a head in the sand sort of “I can’t see it so it’s not there” argument, it’s more of a throw up my hands and say “I give up” – I can control what I do. What do you do to help remove these in the world? (don’t take this the wrong way, I really am curious to hear other people’s viewpoints).

    @Robert – I don’t really spend much on myself at all on a per month basis – after my my bills are paid and my accelerated mortgage payment is transferred, I average approximately $50 per week on incidentals and entertainment. I could stop paying back my mortgage as fast I am, but then I’d just have to pay the bank more money in the long run.

  12. Dave, it’s a fair point – what can I do? The answer is more than you think!

    My wife spent six months working in Cote d’Ivoire a decade ago on a combined micro-enterprise/primary health project. In one part of the project, by funding sewing machines and netting, a group of local women were able to make and sell mosquito nets for people’s beds – a simple, low-cost approach that reduces under-5 child mortality immensely. To put it another way, if you gave twenty bucks to that project, you saved a child’s life. At the same time you helped women to provide for their families, this improving quality of life and health for another family.

    For another approach, read “Three cups of tea”.

    The small development organisation that we support is CAUSE Canada – dedicated to the poorest/most under-supported areas of the world, and to helping local people to help themselves. There are many others worth being part of. Can you stop a despot with your $20? No, probably not – you’ll “only” have saved a life!

  13. @ Nerode – That is a lot! Last Christmas instead of presents I donated nets through World Vision. I will have to look into the micro-loans you and IngaG have talked about.

    Three cups of tea is now on my reading list at the library. Thanks for your reply.

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