Philanthropy 101: How to Start Giving Earlier Versus Later
Philanthropy can be done anytime. There are no fixed rules to it. A person who has surplus funds and wants to donate to a charitable cause can either do it immediately or invest the funds exclusively marked for this cause and donate a more considerable amount later.
Why give later?
There are valid reasons why a person should invest the funds meant for donation. Firstly, it may so happen that when he wants to donate, at that point in time, he may not come across any worthwhile cause. There is no point in giving away charity to unworthy causes or organizations with a dubious reputation.
The second option is to park the fund in an excellent financial instrument or Bank deposits and allow the money to grow. This will also give time to the donor to enquire about effective charities. Therefore, waiting allows the donor to provide more and to the right cause.
And if you’d like to learn more about how entrepreneurs are spending their money and time, while also finding time to help others in need, be sure to read this interview with Thomas Kane.
The Many Benefits of Giving Instantly
But there are good reasons to donate immediately if a person has the fund ready to give. This will help to avoid spending that earmarked charity fund for some other use. Giving directly helps to build capacity for other areas. Then there are tax benefits. As taxation is done yearly, any donations given during that year get income tax benefits in the form of rebates. One should immediately give the needy the help when he needs it the most and not when the donor wants to give, keeping his blessings and tax benefits in mind. With falling interest rates and a dwindling economy, charity funds’ investments may not get the desired return, and the net present value of the upfront payment is more. Therefore, it is better to give upfront.
Suppose any donor wants to give to a particular cause. In that case, he can commit to paying smaller amounts at regular intervals instead of giving bulk amounts in one go. This will allow him to be in touch with the concerned charity and also know about its functioning. The charity will also ensure that donation is used judiciously as they look forward to future contributions. For the giver, he can save an instant cost toward himself by installment donations over a period of time.
Philanthropy has been around for centuries and a practice carried out by every generation. The donation style may have changed, the causes could have evolved, but the motive has always been the same. Many give charities to do good only while others do to seek blessings and for name and fame.
Today philanthropy exists for the same rationale as before, and it is alive and throbbing. People give for various reasons, but the final objective is that it should help the intended recipient.
Philanthropy is a word derived from the Greek “Philos” and “Anthropos,” which means love human. So, if one chooses to be a philanthropist, it is donating for the humans’ welfare. Altruistic philanthropism is when there is no ulterior motive when giving to someone. People can also choose to serve as volunteers in community services apart from donating household things and properties.
Difference Between Philanthropy and Charity
Most people use the terms charity and philanthropy in the same context. Though they work together, there are still differences between the two. One can differentiate the two by thinking about charity as a short-term solution and philanthropy as a long-term solution.
Charity is an emotional response driven by empathy or compassion for suffering. Both are vital to serving humans in need, but they accomplish different things. And as many global entrepreneurs like Tom Kane from Chicago, it’s important to make sure you have your charitable donations in place year after year.
Anyone can become a philanthropist. It is not just for the wealthy. To become one, one has to plan appropriately and do research.
Here are three crucial things that one must plan.
- Narrow down the list of philanthropic activities you would like to do to at least three causes.
- Decide what to donate. It is better to consult your family members or your financial advisor to understand whether to give monthly or annually.
- Decide what type of donation to give. Is it money or property? There are many ways one can build an organization. Donating time and getting involved in service is another way to serve other than just giving out money.
Ready to start giving? Here are some simple steps that can prove that it is easy to be a philanthropist.
- Decide upfront which organizations to support. Focusing on a couple of causes which is close to one’s heart can be emotionally satisfying.
- Decide when to give. This is important if the amount of money to donate is substantial. It could be staggered over some time or paid annually. It is also possible to set up one’s foundation and personally engage in charitable activities. The advantage here is that one can pass on their heirs’ legacy to carry on the noble work.
- Decide the mode of donation. It could be by way of cash, check, or in kind. There could also be shares and real estate properties. Also, make a will where a certain amount can be donated after one’s death.
- Philanthropy is not only for the wealthy. Making a mindset to become one and carrying on giving or doing service even in a small way matters. The charitable organization needs assistance all the time, and even a small contribution is valuable for them.
- If one does not have the money or property to donate, then one can donate their time and skills to the charity services. The value of sharing oneself is priceless and connoted be equated with monetary value. An excellent way would be to become a volunteer. One cannot locate a charity close to one’s area, so that it is convenient to commit and volunteer one’s time.
Conclusion
Once one has decided on an organization whose because one is passionate about, then the next action is to donate. If it is money or property, they choose how and when to give. If it is volunteering and time, then see which community service suits one the best.
Many philanthropists believe that engagement brings about social change apart from monetary help.
