One of my favorite questions to ask clients is this: “What is your personal generosity philosophy?”
I love the question, and I love the answers. Because within those answers show what people really get excited about, and I find myself digging deeper with “Tell me more about that…” for several iterations during the conversation.
Generosity.
It’s a beautiful word in and of itself. It looks pretty, it sounds pretty. And it holds an almost majestic prowess in our minds. There are a myriad of books I’ve read and recommend on the topic, with subtopics including the benefits of generosity, the freedom, the tax planning, the smart way of doing it, and others.
But where I like to start is what it means to someone personally. Where are we right now, today. What do we do currently? What gets us excited? What do we want to do more of? And why?
Although money is the first thing that comes to mind when talking about generosity – and what I’ll mostly talk about here – it doesn’t end there. Generosity also includes our time and our skillset and our existing assets.
With full disclosure that I don’t live these out perfectly, below are three general guidelines I’ve found helpful – both personally in my own life and professionally in conversations with others – to craft or refine our personal generosity philosophy, as well as one caution.
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Give towards your values
One of the beautiful things about humans is how unique we all are. We each have different passions, different experiences, different causes, and different worldviews, different influences. Where I see the most satisfaction in generous giving is when the giving is done towards causes that align with what we hold most dear personally. Some of these values have strong emotions – sometimes positive emotions, sometimes negative.
For example, families who struggled with infertility in the past are more sympathetic to other families struggling with infertility in the present. There’s a shared grief, and a shared knowledge of the struggle. Giving to organizations or to families feels more personal and beneficial and practical.
Individuals who are part of a vibrant church find more satisfaction in giving to that church, seeing first hand the work that is being done.
People who grew up in poverty are generally more sympathetic to those currently living in poverty, knowing the day to day struggle and anxiety.
Graduates from certain schools realize how much of an impact that school had on their lives, and gladly give back to it to help other future students realize that same impact.
Recovering alcoholics or drug addicts may have received substantial help from certain recovery programs and want to give back to help current or future addicts get better.
The challenge here is that we have to be vulnerable with ourselves, and spend the hard time thinking about what we actually DO care about. Too few of us spend that time contemplating these things.
I don’t think we should be legalistic or dogmatic in determining our giving practices, and to borrow a now trite phrase, we should give in way that sparks joy in our lives. If our generosity is done begrudgingly, I think there’s a larger issue at play that should be examined.
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Be strategically spontaneous.
Or as my friend Michael says – the “Strataneous” approach.
The following phrase sounds like financial heresy, but I’m actually not a fan of automating every single financial transaction in our lives. Generosity being one of them. I think there can – and arguably should – be room for spontaneous giving as we see fit.
I ran a Twitter poll out of sheer curiosity to see if people approached their giving strategically or spontaneously. I intentionally left out a third option of “both” – because that’s where I think the magic happens. Just under two-third said they give spontaneously.
I’m a massive nerd when it comes to our budget. Target and Costco receipts are scrutinized so I know precisely how much went into household, grocery, and clothing budget line items. When our family of six goes out to eat, my budgeting side cringes: that tip is going to eat into our dining out line!
So a few months back I decided to create a new subcategory under Generosity, so that I can split that final bill when it hits YNAB into two categories: “Generosity: Tips” and “Dining Out.” It allows me to be generous while not blowing up budget line items.
It’s a silly example, but it’s an idea of how we can be strategically spontaneous. Other real life examples I’ve seen include:
Proactively offering construction tools to people you know could use them for a project.
Carrying extra cash to give spontaneously when you identify a need.
While grocery shopping, identifying some items you can buy double of to share with a random neighbor or friend or family member.
Funding a Donor Advised Fund with cash (or highly appreciated assets) to have ready to distribute to charities at a later point.
Setting aside a “just because” portion of your income to give however randomly as you feel prompted on the spot to give out.
Setting aside a “hosting” spending category to use for inviting and feeding people in their home.
Increasing charitable giving by 1% every year regardless of top line income.
Personally, I think a generous mindset is curated infinitely more by our attitude towards generosity compared to the actual dollars we give, and I think this is why it’s tricky for people. We want a prefined number to give and an organization to receive it! We want to check off that box – but I think by only checking off that box, we miss the larger (and more beneficial) point. Setting up ourselves to be strategically spontaneous could help with this.
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Remain consistent.
A great way among others to fight off lifestyle creep – or at least keep it at bay – is being consistent in our generosity.
The average American gives something in the ballpark of 2.0-2.5% of their gross income each year. That number has remained consistent as long as I’ve been looking at it. It is what it is, but the larger concern I have is how as income increases for households, generosity declines. And I’m not talking about percentages – I’m talking about actual dollars. I don’t know most of these people, and I’m not judging – but there is at the very least a level of concern.
I’ve noticed that in conjunction with being strategic, there is also great benefit to being consistent. Too many people get caught up in giving numbers – gross or net? Pre tax of after? AGI or total income?
I truthfully don’t think it matters much.
Once you identify what seems right, just be consistent with it. Using a target percentage of whatever top-line metric you decide on is beneficial year over year. I happen to love one of my client’s generosity philosophy: “Give __% of of [company’s] net income + personal pay + large reinvestments.”
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One caution
One last – and quick – caution. I don’t think generosity has to be defined by that which is tax-deductible. Sure, if we can claim a deduction, wonderful. But just because you can’t write off a gift doesn’t mean it’s any less valuable or important or in alignment with your own values and generosity philosophy.
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I happen to believe there is tremendous power and tremendous opportunity for every family and individual to define their personal generosity philosophy. There are so, so many needs around us. We are one of the must abundantly rich countries to ever exist – and chances are, if you’re reading this, you’re one of the richest people as well measured relative to the world. (Doubt me? Go check out this interactive, albeit it archived, Global Rich List website to run a comparison of your own.)
The world could use some more generosity – and I think our souls could use more as well.