Philanthropy

[Longnose]

Today I was talking with a friend and he brought up Chuck Feeney. The billionaire who gave it all away. Its a pretty cool story for anyone who isn't familiar or who wants to look it up. Then we got caught up talking about being charitable. I've always wanted to be more charitable with my money and i like hearing about how others do it. Pabrai talks about giving away 2% of his net worth every year. Some of my relatives have tied charity into their Christmas instead of giving out gifts they make donations to foundations in the name of all the kids/grandkids. Then you get into the challenges of giving it away effectively. I've been to a few charity events and donated to some of those causes but I always feel like I'm donating to a black hole. I know Bill Gates talks about the challenges of trying to solve the worlds toughest problems and using money wisely to do that can be a challenge. 

 

Anyways, I'm not sure what I wanted to get at here other than I hope to be more philanthropic in the future and admire many charitable people in my life.

[maplevalue]

Many big name investors sit on investment committees for non-profits they are passionate about. A good way to be connected with a non-profit, contribute your skillset, and also gives you confidence when you give money it is being managed responsibly.

[Gregmal]

Personally Ive found it much easier, and also much more directly impactful to just be generous/considerate within the course of day to day life. You can find tons of worthy GoFundMe campaigns. You can do simple things like pay for the person behind you at the drive thru, you can tip 30%. Volunteering, especially if you believe time is money, is also a great direct way to contribute to the enrichment of the lives of others. If I sent money off to some third party run venture, I'm not quite sure what would ever come of it. However I can know for sure the people in the above examples feel good about it, and even if just temporary, it makes a positive difference for them. 

[Castanza]

2 hours ago, Longnose said:

Today I was talking with a friend and he brought up Chuck Feeney. The billionaire who gave it all away. Its a pretty cool story for anyone who isn't familiar or who wants to look it up. Then we got caught up talking about being charitable. I've always wanted to be more charitable with my money and i like hearing about how others do it. Pabrai talks about giving away 2% of his net worth every year. Some of my relatives have tied charity into their Christmas instead of giving out gifts they make donations to foundations in the name of all the kids/grandkids. Then you get into the challenges of giving it away effectively. I've been to a few charity events and donated to some of those causes but I always feel like I'm donating to a black hole. I know Bill Gates talks about the challenges of trying to solve the worlds toughest problems and using money wisely to do that can be a challenge. 

 

Anyways, I'm not sure what I wanted to get at here other than I hope to be more philanthropic in the future and admire many charitable people in my life.

I’ve found that getting involved in your community presents many opportunities to help individuals you meet along the way. I have seen enough nonsense from these big charities to shy away from the “black hole” as you describe. Giving directly to individuals (money, services, time, advice, skill teaching etc.) you meet and building relationships is way more rewarding, impactful and fulfilling in my opinion. Plus, you’ll make some good friends along the way with individuals you might not normally have associated with. People from different walks of life are more similar than one would think. 
 

Good luck! 

 

[Nomad]

15 minutes ago, Gregmal said:

Personally Ive found it much easier, and also much more directly impactful to just be generous/considerate within the course of day to day life. You can find tons of worthy GoFundMe campaigns. You can do simple things like pay for the person behind you at the drive thru, you can tip 30%. Volunteering, especially if you believe time is money, is also a great direct way to contribute to the enrichment of the lives of others. If I sent money off to some third party run venture, I'm not quite sure what would ever come of it. However I can know for sure the people in the above examples feel good about it, and even if just temporary, it makes a positive difference for them. 

I totally agree with this approach. While I hate to be cynical, I find that most "non-profits" are either grifts designed to enrich insiders (viz. the Susan G. Komen executive who was paying herself $700k per year), fronts funded by industry (e.g., "recycling" charities supported by plastics manufacturers), or giant tax evasion schemes (see Ingvar Kamprad's Dutch foundations for IKEA). 

The people who are running these things certainly aren't "non-profit." Buffett/Feeney are two of the good guys, but take a look at Charity Navigator or the BBB charity ratings sometime and you'll be utterly shocked by most things you see. The governance, accounting, and executive compensation at many charities is so bad that it wouldn't pass muster at a microcap cigar butt trading OTC.

My approach is to mostly give directly, to always give anonymously, and to never take a tax deduction for my contributions. I don't claim that my approach is the right one, but it's in line with what I believe and that's all that matters to me.

Edited April 29, 2021 by Nomad

[Cigarbutt]

3 hours ago, Nomad said:

My approach is to ... and to never take a tax deduction for my contributions...

Question

If your approach entails to minimize delegation to others for the purpose, why not maximize the tax deduction and use the tax saved to contribute to the next year's allocation?

[dwy000]

7 hours ago, Longnose said:

Today I was talking with a friend and he brought up Chuck Feeney. The billionaire who gave it all away. Its a pretty cool story for anyone who isn't familiar or who wants to look it up. Then we got caught up talking about being charitable. I've always wanted to be more charitable with my money and i like hearing about how others do it. Pabrai talks about giving away 2% of his net worth every year. Some of my relatives have tied charity into their Christmas instead of giving out gifts they make donations to foundations in the name of all the kids/grandkids. Then you get into the challenges of giving it away effectively. I've been to a few charity events and donated to some of those causes but I always feel like I'm donating to a black hole. I know Bill Gates talks about the challenges of trying to solve the worlds toughest problems and using money wisely to do that can be a challenge. 

 

Anyways, I'm not sure what I wanted to get at here other than I hope to be more philanthropic in the future and admire many charitable people in my life.

Probably depends on how much you're talking about.  If it's small amounts, giving big tips and small donations are meaningful to the recipients and you get much more direct impact.  But once you get into the $000's you probably want to make a larger scale, broader impact.  If you have the time (which many times is more impactful than straight up $'s) it might be preferable to get involved with a charity or activity that supports a cause you believe in.  And once you are involved it's much easier to give funds because you know where its going and can see the impact.  It's a win-win for both you and the cause.

I must admit I don't understand those who don't take the taxable deduction though.  It's basically free money that can increase the amount of the gift if you re-donate the tax savings as well.

[Nomad]

8 hours ago, Cigarbutt said:

Question

If your approach entails to minimize delegation to others for the purpose, why not maximize the tax deduction and use the tax saved to contribute to the next year's allocation?

It's a very logical question and not one for which I necessarily have a rational, utility-maximizing response. For personal reasons and beliefs that I won't get into here, if I decide to contribute, focusing on what I can "get back" out of donating (even if I were to use the funds saved to donate more to others) defeats the whole spirit of giving and is something I avoid. Again, I don't claim it's rational, but I am not homo economicus and never will be. 

[DooDiligence]

23 minutes ago, Nomad said:

It's a very logical question and not one for which I necessarily have a rational, utility-maximizing response. For personal reasons and beliefs that I won't get into here, if I decide to contribute, focusing on what I can "get back" out of donating (even if I were to use the funds saved to donate more to others) defeats the whole spirit of giving and is something I avoid. Again, I don't claim it's rational, but I am not homo economicus and never will be. 

I get it. Giving without expecting anything back, including recognition, is IMO giving with all your heart.

[SharperDingaan]

For many people the contribution is just a tax deduction - how do I get the most benefit from the dollar I contribute. Most are OK with a tax deduction, creating a charity where you are the main beneficary ... not so much. However a great many charities are simply cash raising machines; net of costs/bribes. little benefit flows out at the end of the pipe. The default option.

Just about any personal involvement, delivers more than the default option. From giving money away as a secret santa, donating time/services, or paying for infrastructure in some far off place. For the most part it is the medium/long-term view - and a lot more ruthless. The reality is that many are not going to make it - accept the loss, so as to give the remainder a better shot at life. Help them escape the circumstance, don't trap them in it. 

Lots of different approaches. We've generally found it better to invest in your kids experience (development projects. refugee camps, etc) first, then expanding circles around the family. Helps drive home just how priviliged your family is, and sets the family up for a lifetime of giving, vs just a once and done experience.

SD

 

Edited April 29, 2021 by SharperDingaan

[tytthus]

Noticed this article on Morningstar:

 

https://www.morningstar.com/articles/1040717/which-charities-deserve-your-dollars