I have two good friends that have opposing view on the best way to give to charity. One never gives to charity saving all his money in a special account. He is building it up so that it reaches $1 million where he can then use that as a base and give away all the interest the money earns from that time forward. While he doesn’t give any money now, he feels that by creating a large sum foundation, he will be able to give a lot more that will never run out even after he’s dead. When I mentioned that I have another friend that gives 10% of everything he makes to charity, this friend said that giving money to charity like that fails to provide a way to sustain the giving over a long period. Once he stops working, then he doesn’t have money to give to charity.
The other friend who gives a set 10% of the money from his paycheck each month believes that giving to charity is like most other things. If you instill the habit, you will continue to do it as you gain more wealth. When I mentioned that the other friend and how he plans to give to charity, his initial question was, “What if he never reaches $1 million?” he then explained that even if he does, he thinks it will be difficult for him to suddenly start giving money when he hasn’t done it at all before. When you have always given 10% over time, it’s a habit, but if you have never given anything to charity, he said it would be difficult to all of a sudden hand over $10,000.
While I do give money to some of my favorite charities on a monthly basis, I also keep some on the side to give to good causes that I come across. I haven’t set up a charity fund, but it is an idea that has some appeal to me. What is your view on charitable giving? Should you do it consistently or is it better to create a fund that can be dispersed later?
Please share your own experiences on this topic as a wide variety of views and thoughts are helpful to everyone. If there is one thing that I have learned about personal finances from all of you is that there are always exceptions to the rule and differing circumstances can mean completely different solutions. If you have a blog and you have written about this topic in the past, feel free to link to your writing (although a short summary would be helpful). If you have recently read a good article on this topic, please links and share in the comments.
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