This article is a continuation of the series titled, The financial intelligence of giving, which is looking at the significance of giving, arguably an important part of one’s financial health depending on your set of beliefs.
“Surplus wealth is a sacred trust only to be used for the good of others,” Dave Ramsey says in his Financial Peace University (FPU) course quoting Andrew Carnegie, the Steel Industrialist who donated significant amounts of his wealth to charitable causes. Ramsey’s approach to finances is from a spiritual perspective, which may give some pause, but his program raises some really interesting points. One of the more important teachings of FPU is that of the clenched fist, which basically states that while no money leaves a clenched fist, no more can enter it. Conversely for the open hand, some can go out through giving but more can come in as well. “You’re going to build wealth and you’re going to win at relationships the more you give,” he goes on to say.
A little known secret is that a good number of wealthy individuals and families have incorporated giving into their finances, similar to the alumnus from my graduate program described in part one. It’s in part how they’ve gotten and stayed wealthy.
There are two more nuggets from FPU that have stood out to me. The first is that in order to be in position to give, one’s financial house must be in order, or put another way, one must be in position to generate the above mentioned surplus in order to be able to spare some, something that takes commitment and planning. The second nugget is adopting the mindset of giving to relatives and friends in times of need as opposed to lending money and expecting it back.
If giving to and through a church is not in your belief system, there are other places to give to as well such as your alma mater (s). Donations are a large part of the business of higher education. Private institutions for example have whole departments and campaigns for soliciting alumni donations. Historically Black Colleges and Universities (HBCUs) are in large part struggling due to anemically low rates of alumni giving, so if you’ve attended and HBCU and are reading this, your alma mater would likely welcome your support.
It’s often said that one should give without expectation of reward or reimbursement but the reality is that the tax-deductibility of gifts generates incentive for many individuals and companies to open their wallets. Again, individuals who are doing well or have accumulated wealth by their own doing, regularly incorporate giving as a part of their tax management strategies, which is why it is big deal when Presidents and the Congresses contemplate closing tax-deductions for giving.
In closing, this two part piece wasn’t written to tell anyone what to do with their money but simply to draw attention to the importance of giving. Giving by the way doesn’t always have to be monetary. As one of my mentors once said which some people may disagree with is that, “there are multiple ways to tithe and give such as with your time.” One of the good things about the holiday season is that it highlights giving, but it’s also something that should be considered throughout the year.