Each passing holiday season reminds us of the opportunity to give to others in need, but the truth is, we can deploy our time and money throughout the year and still reap the benefits of donating and volunteering. While this time of the year can propel an initial interest in charity, hopefully, the benefits you see in your heart and pocketbook encourage you to find ways to give back year-round.
Aside from feeling fulfilled by helping others and a sense of belonging shared with those you connect with through your giving efforts, there are also significant financial benefits to be had. You have various options in how you approach charity, whether you volunteer your time or donate cash or other assets to your favorite nonprofits, and any approach you take will have an impact.
Personal Growth, Connection and Contentment
First, let’s start with your emotional well-being. If you have been charitable in some form, you’ll likely recognize the truth in this: Giving back actually does help us feel better about ourselves as confirmed by multiple studies. One such study, conducted by professors at the University of Missouri, Columbia, and the University of California, Riverside, revealed that those who gave to others tended to score much higher on feelings of joy and contentment than individuals who did not give to others.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Another study, led by psychologists from the University of Chicago Booth School of Business and Northwestern University Kellogg School of Management, showed that we feel good about ourselves for an extended period after we’ve given to others.
When it comes to volunteering your time, one powerful benefit comes from the sheer activity of networking — meeting new people — possibly in your current career role and/or industry. Whether done online or in person, creating new career connections while simultaneously helping others can be a real win-win. If you so choose, you can also talk about your volunteering activities with colleagues and clients or include your passion for giving back in your company’s marketing materials, such as in your corporate bio.
Those who see you in this new light might even be inspired to give back in their own way. You may even consider recruiting family members to join in; it’s a great way to instill a sense of gratitude for one’s blessings and inspire others to give to those who are less fortunate.
Another benefit of volunteering your time is the real potential to sharpen your current skills – and even perhaps acquire new ones. As a Certified Financial Planner, I’ve volunteered with several nonprofit organizations in recent years to offer pro bono financial guidance to those who need it but don’t have sufficient financial assets to qualify or pay for services. It’s a wonderful feeling to both offer concrete advice to those ready and willing to implement it and also learn new ways to communicate that advice.
Don’t forget: The time you spend volunteering for an organization is not tax-deductible, but expenses such as travel or parking costs may be.
Trimming Your Tax Bill Doesn’t Hurt
Another form your generosity can take is donating financial assets to nonprofit institutions. Doing so may very well net you a tax write-off. Specifically, when you donate cash to a public charity, you can generally deduct up to 60% of your adjusted gross income. Moreover, appreciated assets, including long-term appreciated stocks and property, are generally deductible at fair market value, up to 30% of your adjusted gross income, provided you’ve held them for more than a year.
For those who must take required minimum distributions (RMDs), donating money from a tax-deferred retirement account such as an IRA can absolve you of otherwise having to include RMD amounts as taxable income in the year that they must be taken. Specifically, you can elect to make qualified charitable donations (QCDs) up to $100,000 each year that are not included in your annual taxable income.
Your employer may even match your donations up to a certain amount, so be sure to inquire if they will.
The bottom line is that all forms of altruism make positive impacts both in the world and in your personal life. The amount of time, money or both that you can share with others in need will vary throughout your lifetime, but the benefits of doing so to both you and others are both meaningful and measurable.
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant.
-
U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social SecurityTreasury President Trump signed an executive order forcing the federal government to phase out paper check disbursements by the fall.
-
Bigger Social Security Checks Are Arriving in AprilPayments to eligible retired public sector employees will increase starting in April due to the Social Security Fairness Act (SSFA)..
-
Seven Questions to Ask When Evaluating Personal Loan OptionsTaking out a personal loan too hastily could lock you into unfavorable terms with an untrustworthy lender. Ask these questions before signing anything.
-
The Three Biggest Fears Keeping Retirees Up at NightHere are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
-
What Can a Donor-Advised Fund Do for You? (A Lot)DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
-
Estate Planning When You Have International AssetsEstate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
-
Three Essential Estate Planning Steps to Protect Your Nest EggAfter dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
-
Is Chasing the American Dream Ruining Your Financial Life?Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
-
Retiring With a Pension? Four Things to KnowThe road to a secure retirement is slightly more intricate for people with pensions. Here are four key issues to consider to make the most out of yours.
-
How to Teach Your Kids About the Tax Facts of LifeTaxes are unavoidable, so it's important to teach children what to expect. Also, does your child need to file a tax return for 2024? Find out here.
