A Meaningful Approach to Giving: How Much Should You Really Donate?

How do you decide how much to donate to charity? So many variables go into this decision. Also, we all have different financial resources and priorities. But I still want to say something about this important decision that I hope can apply to all of us in our group. One guideline people have often used is to give 10% of one’s gross income. According to ChatGPT, the concept predates formal law. In the Book of Genesis, Abraham gave a tenth of the spoils of battle to Melchizedek, the king and priest of Salem. Later, Jacob vowed to give a tenth of all that God would give him. 

Peter Singer’s strictest guideline is that we should give until the point where giving more would put us in the same position as those we are trying to help. He quickly acknowledges that he and his wife, Renata, do not meet this standard. I believe he gives away about 33% of his income and has for a very long time. When he won a $500,000 prize as an exemplary humanitarian, he gave away all of it the next day – $300,000 to The Life You Can Save and $200,000 to other nonprofits. Obviously, the fewer financial resources one has, the more burdensome it is to give away some. 

Another consideration is not only one’s income, but also one’s wealth. For example, those of us who are “retired” have less income, but may still have considerable wealth. I wrote a series of blogs on The Life You Can Save’s website on achieving your personal best in philanthropy that you can find here. The Life You Can Save has an impact calculator on its website that shows the impact of various size donations to our charities.

Diana and I look at our total wealth and think about the amount we want to give to our children and grandchildren, to ourselves and to nonprofits. Currently the amount we have given or plan to give to nonprofits is about 18% of our wealth. Much of this we already have given (~40%) and we continue to give regularly when it will have the greatest “present value.” There is a strong argument for not waiting to leave money until you die, although it is tempting to do so as you will know all the demands on your resources by then. Some people feel they can make money by investing and will, therefore, have more to give later. But it is important to consider the “present value” of money for the beneficiaries of our nonprofits. Again, a note of caution is important: People with less income and wealth “feel” their donations much more, as they have much less “discretionary” spending money.

Diana and I believe we likely have given too much to our children to justify ethically. Similarly, we spend more on ourselves than we can justify. But there you go — we by no means meet even close to the highest ethical standard even though most people consider us generous. I think part of how I rationalize our giving is that we have helped raise many millions for The Life You Can Save’s recommended nonprofits. And I spent ten years volunteering as the Executive Director of The Life You Can Save. The phenomenon of rationalizing not doing more has been referred to as “moral licensing,”  a psychological phenomenon where performing a good deed or action in the past makes individuals more likely to subsequently engage in a morally questionable, unethical, or otherwise problematic behavior.  Beware of moral licensing!

I hope this has been helpful, but if you have not read Peter Singer’s, The Life You Can Save, you will find that it does a great job of addressing the issue of how much to donate. It is available here on The Life You Can Save’s website. 

Feel Good. Do Good

Charlie