Giving makes us feel good inside. From giving someone a compliment to making a large charitable donation, it can create a sense of joy knowing we’ve made a positive impact. For many, the desire to give is innate. Acclaimed motivational speaker Zig Ziglar once notably stated, “You can have anything in life you want if you will just help other people get what they want”. For those of us inclined for volunteering and charitable giving, the lists of people, causes, and organizations we’d like to support can often exceed our capabilities for doing so. That can all change in an instant with a sudden inheritance.
Looking at the numbers, the Boomer Generation did pretty well. As they prepare their estates, many inheritances are predicted to be passed on over the coming years. Here in 2019, we are currently amid what some experts are calling the largest shift of generational wealth ever before in history. Much more than a few savings bonds and grandmother’s pearls estimates place the total amount of wealth transferred through inheritance, by the year 2026, at close to four trillion dollars. While perhaps not all recipients will choose to act as agents for good, many people will find that charitable giving can lead to rewards both intrinsic and in their bank accounts.
Increase Your Happiness Through Giving
It’s as simple as that. Academic research shows that volunteering and making charitable donations can have a direct and positive impact on personal happiness levels. Researchers at the University of California, Riverside and the University of Missouri, Columbia, published a joint study demonstrating connections between charitable giving and feelings of positive increases in mood. The study also suggests that we are prone to repeat behaviors which bring us joy, leading to more benefits over the long-term.
Other research shows a physiological reason for wanting to give – a natural high. A University of Oregon study shows how giving can trigger the brain’s reward center (yes, it’s a thing), producing a dose of endorphins and dopamine that’s pretty hard to match.
Improve Your Community
Research shows a connection between life satisfaction and making donations, with measurable increases in individual happiness as more community members participate. It makes sense. As more people in the community give and become mindful of each other, the entire space will improve.
Charitable donations of time and resources can be invested right into your local community, helping improve quality of life in many ways. This can be through donations of time, food, money and more. The more we all give, science suggests, the happier we all will be.
All those feelings of happiness, joy, and satisfaction can have positive impacts on your physical and mental health. A joint academic study between Rachel Piferi (Johns Hopkins University) and Kathleen Lawler (University of Tennessee) demonstrated clear links between charitable giving and reductions in blood pressure. This can lead to reduced risk for serious medical events, such as heart attack or stroke. The study also suggests habitual gifters can enjoy reduced rates of stress and better overall health.
By volunteering, we can also enjoy increased levels of physical activity, with the multitude of health benefits associated with an active lifestyle.
Be a Role Model
Parents aim to shape their children into responsible, caring adults. By demonstrating to them a willingness to donate our time and money, we can help promote an attitude of generosity within them. Building a strong community begins at home, and what better way than to set a positive example.
Making charitable donations of time and resources is also a strong way to build and strengthen relationships within our families. Your gift might motivate others in your family to do the same, leading to shared experiences engaging with mutually supported causes.
Financial Benefits to Charitable Giving
Taking advantage of the financial benefits of charitable giving takes nothing away from your altruistic motivations. It does, however, help you grow and preserve your finances so you can continue your charitable work. Increased attention to finances will help uncover the many ways charitable giving pays back, helping you achieve more.
Improve Your Mental Accounting
Habitual philanthropy can help you better monitor and control your finances. If you’ve recently received an inheritance, money management should become a top priority. Too often, the seemingly endless sums gained through an inheritance evaporate, leaving little but a hard lesson. Scheduling regular charitable donations can help promote increased attention to finances, leading to better accounting behaviors.
Donated cash, time, possessions and more can lead to tax deductions, reducing your annual tax obligation. Donations made to charity can lower your income into a more-manageable tax bracket, greatly reducing your tax burden. Charities lose nothing by offering tax incentives as rewards for donations, it’s a benefit built into their tax status. Taking advantage of these rewards is in keeping with a smart money mindset and is highly recommended.
Vehicles for charitable donations can include:
- 501(c)(3) non-profit corporations
- Donor Advised Funds (DAF)
- Charitable Lead Trusts
- Charitable Remainder Trusts
- Real estate, cash, and stocks
Other alternatives for donating time and resources are available. A financial advisor experienced in managing inheritance sums can help you determine donation strategies that potentially offer the most benefit to all parties.
Receiving a large inheritance can create a lot of options, very quickly. If you expect to receive an inheritance or have gained one already, contact ProsperiFi to learn how you can do more with it. For more information on charitable giving strategies and the benefits of making intelligent donations, visit ProsperiFi.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There can be no guarantee that strategies promoted will be successful.
This information is not intended to be suitable for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.