The fact that charitable giving can help reduce your tax burden is well known, especially if you’re in a high bracket. But the benefits of giving extend far beyond tax breaks.
Of course, giving can be a challenge – especially when money is tight. After all, your income could just as easily go toward a college savings fund for your kids, a much-needed vacation, or even a new pair of shoes. But whether you’re interested in the tax benefits or have altruistic motives – or a little of both – you can end up getting back a lot more than you give when you donate valuable items, cold hard cash, or even your time to your favorite causes. In fact, the emotional, social, psychological, and financial benefits of charitable giving often outweigh the satisfaction of splurging on yourself or your family.
The Benefits of Giving Things Away
1. Activate the Reward Center in Your Brain
A study by a University of Oregon professor and his colleagues demonstrates that charitable contributions create a response in the brain that mimics one activated by drugs and other stimuli. This response elicits a surge of dopamine and endorphins that are experienced as “hedonic” and rewarding. Charitable giving can feel pleasurable in the deepest parts of your physiology – more so than a night on the town or a new outfit.
2. Improve Life Satisfaction
A German study provides ample evidence that people who give more to others – in both time and resources – experience greater satisfaction in life than people who do not. In fact, communities of people with high levels of giving tend to demonstrate greater satisfaction within the community than groups of people who do not give generously. Essentially, you’re going to be happier in your community if it’s made up of folks who give to one another.
3. Feel Happier
While life satisfaction is one thing, general happiness is another. In a study by professors at the University of Missouri – Columbia and the University of California – Riverside, people who gave to others tend to score much higher on feelings of joy and contentment than individuals who did not give to others.
4. Protect Your Local Community
National safety net programs, such as Food Stamps and disability benefits, can be of great benefit to Americans, but giving to community organizations can provide important local safety nets that guarantee vital assistance during crises and emergencies as well. Community organizations tend to respond faster and more appropriately to the needs of local communities than larger organizations do, and these agencies obtain most of their funding from private donations. Local giving, therefore, provides support for the programs that enhance community well-being.
5. Improve Key Measurements of Your Health
People who volunteer score better on key measurements in overall health, such as resilience during physical activity and blood pressure levels, than people who do not. An article in Consumer Reports indicates that older adults who volunteer their time have improved cognitive function, increased walking speed, increased ability to climb stairs, and decreased rates of television watching than people who do not volunteer. All of these indicators are linked to better health in elderly individuals.
6. Reduce Rates of Stress
The improved happiness and health of people who volunteer and make charitable contributions is likely linked to reduced rates of stress, as well. Researchers at Johns Hopkins University and the University of Tennessee found that charitable givers experience reduced rates of stress and lower blood pressure compared to those who do not give.
7. Induce Civic Engagement
If you’ve found a cause you like to support with donations, it’s usually just a matter of time before you start contributing your time to that cause as well. A hearty rate of voluntarism improves the overall health and longevity of local organizations, so give your money and your time to a cause you believe in.
8. Improve Your Employee Morale
Corporate enterprises give for all kinds of reasons, including an improved public image, increased profits, and tax breaks. And, according to research, individual employees who contribute their time or money to a corporate cause are more likely to report improved worker morale.
Participating in your company’s giving campaigns can make you feel like a part of your corporate team. Employers who want to improve retention and team-building should offer company giving campaigns and volunteer opportunities for employees.
9. Increase Your Community Standing
Generous givers tend to have more influence with their pet projects than others do. For instance, one of the organizations I contract with is far more likely to have generous givers serve on the board than people who aren’t financially invested in the cause. In turn, these board members are in a better position to influence the agency’s decision-making because they have demonstrated their interest and investment time and time again. The more you give to an organization, the more likely you are to influence that organization’s activities.
10. Reduce Your Tax Burden
Finally, and most famously, charitable contributions can reduce your tax burden at the end of the year. If you’re itemizing your tax return, you can report the dollars you contributed to charity for a deduction in your taxable income. Even if you’re short on cash, you can donate unwanted items to charity (such as clothing, furniture, and vehicles) and claim the value of these goods as a deduction.
For instance, if you make $70,000 annually and contribute $7,000 (or the equivalent in unwanted items) to charity, then your taxable income is reduced to $63,000 on an itemized return. This can add up to a substantial savings, especially if you’re in one of the higher tax brackets.
Final Word
Interestingly, research has indicated that the people who spend the most time thinking about charitable giving are actually the least likely to give. Unlike impulsive spending, impulsively giving can bring wonderful benefits to your mind, body, and community.
If you’re nervous about starting with cash donations, get your feet wet by giving away some items around your home that you don’t want anymore, such as toys, clothes, or furniture. Then, when you’re in a position to give financially, take that step – you’re not only benefiting the well-being of those you give to, you’re benefiting your own as well.
Have you experienced the benefits of charitable giving in your own life?