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Giving is important to your financial plan

Studies have shown that philanthropy is one of the top three characteristics wealthy people share.

Charitable giving has become an essential piece of a financial plan. Studies have shown that philanthropy is one of the top three characteristics wealthy people share – the other two characteristics are spending wisely and investing for the future. On average, self-made millionaires give away 10 per cent of their earnings.

Giving won't set you back financially. Research shows there’s a Return On Investment (ROI) when you invest in your community. Rather than getting a dollar return, which is typical of a financial investment, you benefit through expanded networks, increased sales, leadership opportunities, promotions, marketing, job offers, publicity, and much more. Additionally, Revenue Canada supports giving and will provide an attractive tax credit.

It can be hard to find extra dollars to give. It’s hard enough trying to save 10 per cent into your RRSP and pay off debt. But, giving doesn’t just happen. You have to plan to make it happen. Philanthropy helps to build safe, healthy, growing communities. Giving goes beyond donating money. Charities require volunteers to deliver programs and fundraise, and they need strategic direction from board and committee members.

Get involved. First, do some soul searching to determine the causes that are meaningful to you. Has your family been impacted by a particular illness? Do you love the arts? Do children’s sports camps make your heart melt?

Next, research the organizations you’re passionate about. If you’re stumped, visit sites like www.canadahelps.org, www.imaginecanada.ca or your local volunteer and community foundations. Try to pick one or two organizations to make your "charity of choice."

Find out what the organization needs (usually money and volunteers) and how you can give. Get to know them by volunteering your time and skills. If you’re a web designer, spice up their website. If you’re a banker, run a financial training program.

When you’re ready, contribute financially to your charity of choice. From a budgeting perspective, it’s helpful to contribute regularly on payday. Then, aim to grow your giving annually; e.g. $50 to $75/month. There are two approaches to donations: either give small amounts to many charities - $20 here, $50 there; or, give to fewer charities, but in greater amounts - $1,000 to one or two organizations. More dollars to fewer organizations can have a greater impact.

Check whether your employer or professional association will match your donation or give you time off for volunteering.

Whatever your motivation is for giving, when you contribute your time, talent and money it demonstrates leadership, and people pay attention to that.

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