Editor’s Note: This post from Carrie comes at a very relevant time. Widespread famine, drought, and poverty in East Africa has led to the death of 29,000 children in the last month, and could kill as many as 600,000. If you want to donate, you can do so through Save the Children, an NGO that fights for the rights and lives of children, at www.imgonnabeyourfriend.org. ~ Henry
The act of giving is driven by compassion, love and the desire to help others. The giver can be just as uplifted by the act of giving as the beneficiary, but there are tangible benefits to giving as well. Here are several ways that giving can benefit your personal finances:
Tax Deductible Donations
The Internal Revenue Service (IRS) will give you a tax break for donating your money to churches, organizations and charities. If you can itemize on your tax return, you will be able to reduce your taxable income by a certain percentage, depending on your income tax bracket. If you are in the 25% tax bracket, and you donate $5,000 to charity, you will save $1,250 off your tax bill.
Reaping What You Sow
The Universal Law of Giving works hand-in-hand with the Law of Receiving. When you give something, you must, by cosmic law, get something in return. What you get doesn’t necessarily come in the same form as you gave it, but you will receive something equal or better, in a form you can use and appreciate.
Bettering Your Community
Giving to charity helps make the community better by providing goods and services to those who might not have access to them. You directly increase the quality of life around you, which will raise the standard of living for everyone, including your own family.
Giving Reflects Positively on You
Being involved in charities and donating to nonprofit organizations can be a reflection of good character on the part of the giver. Let’s face it: giving your money or your time shows that you aren’t just focused on making money or selling a product. People will want to support you because you support other good causes. You shouldn’t give just to get ahead, but it can have its perks.
Setting Good Things in Motion
Money moves in circles. It requires circulation to grow and reward anyone who uses it (insert Lion King’s Circle of Life theme song here). If you withhold too much of your money, your family, friends and community will all suffer; you could even be sabotaging your own finances. When your hand is open to give, it’s open to receive.
Another way giving can have a positive effect on your finances is through a program called SHARE, or Self Help And Resource Exchange. It’s a nonprofit organization that offers groceries at a reduced cost through a volunteer, community-based distribution system. By serving a few hours of time, volunteers can purchase food at heavily discounted prices compared to a regular supermarket. Everyone is welcome and you can serve a specific period of time on a monthly basis to any community task of your choosing, like a library, church or local community center.
The core purpose for giving is to benefit the communities and people around you, and whether you provide your time or just cash, offering help in any capacity will have a positive effect on your own family and finances.
Carrie Smith is a PerkStreet Customer Columnist who has worked as a freelance Certified Bookkeeper for nine years and as a Tax Specialist for four. She specializes in small business and oil and gas accounting. She has written several finance and accounting articles at Hubpages.com, and also writes regularly on her own blog. Follow her on Twitter @applecentsmith.