As Anne Frank eloquently said, “No one has ever become poor by giving.” Donating to charity is one of the most rewarding acts, with several benefits for your mental, societal and financial health.
If charitable donations have yet to become one of your financial habits, this is the year to make it happen. Here’s what you should know about today’s giving behaviors, the long-term advantages and how to start donating to a cause you care about.
Giving Stats That’ll Inspire You to Donate
According to the Charities Aid Foundation World Giving Index of 2019, Americans are more generous than ever. The United States earned the No. 1 spot as the most giving country worldwide, with a score of 58% accrued over the last decade. Although money is the most common form of charitable donation, 72% helped a stranger, and 42% volunteered their time or services.
Nearly 60.7 million Americans formally volunteered through an organization from September 2020 to September 2021, amounting to 4.1 billion volunteer hours and $122.9 billion. Consumers have also placed increasing pressure on businesses to maximize their giving potential. As a result, corporations contributed $21.08 billion to charities in 2021 — about 23.8% more than in 2020.
Of course, foundations and nonprofit organizations work tirelessly to garner financial support. The most successful organizations have maintained a 43% retention rate in the U.S. These numbers are impressive — especially considering the more recent financial constraints of the pandemic. Despite economic downturns, international lockdowns and heightened uncertainty around COVID-19, the Giving Institute highlighted a whopping $471.44 billion in donations by the end of 2020 — the highest amount ever recorded.
Charitable success comes as the world embarked on the most crucial movements of its era — Black Lives Matter, Time’s Up, Me Too, the Climate Strike, March for Our Lives and marriage equality, among others. The demand for nonprofit measures to address these issues and empower change is dire, but their efforts are fraught without donations.
6 Reasons Donating to Charity is Beneficial
Millions of people worldwide have discovered the positive effects of charitable donations on their lives, others’ lives and the planet. How does giving make the most significant impact? These six long-term benefits should convince you to contribute to a cause you believe in.
1. Boosts Your Mental Health
Altruistic behaviors release endorphins that induce happiness — the “helper’s high.” These chemicals include serotonin for mood regulation, dopamine for pleasure and joy, and oxytocin for greater connection.
Studies have long backed this notion up. Researchers have found being kind to others enhances life satisfaction, and reduces depression and anxiety. Overall well-being also improves when givers take time to reflect on their altruism.
Regardless of how you give — money, time, services or another method — doing something good for others positively affects your mental health. It also increases your life expectancy. A 2020 study from Harvard University suggests people who volunteer more than 100 hours annually have a lower risk of death, less loneliness, and greater optimism and fitness.
2. Deepens Personal Values
You may be concerned about providing clean water for populations in developing countries. You could also have a passion for educating young girls. Locally, you might want to address lagging education, animal welfare or keeping drugs off the streets. Whatever you value likely steers your propensity for giving.
From the theory of human values, universalism and benevolence influence philanthropic decisions the most. Universal morals and values in particular indicate empathic concern, preservation, and a commitment to equality. Those who uphold these values likely donate to medical research and human rights groups. Environmental and humanitarian causes are also important to these individuals
These people often view giving to charity as a privilege as much as it is an obligation — if one has the means to donate, they should. Whatever they do to touch another’s life or make a difference is typically rooted in what they hold dear. Acting according to their guiding principles only deepens those values.
3. Creates Long-Lasting Impacts
If you choose a reputable charity, you can guarantee your donation will go a long way in creating positive change. Organizations divest that money in special programs and campaigns that drive their efforts.
Understandably, some people are concerned taxes eat up most charitable donations or the money goes toward administrative purposes rather than people in need. You might contribute to a charity before tax deductions on your salary or leave a gift in your will if you’re worried your cause won’t receive the total amount. Ultimately, every penny counts and allows charities to continue their mission throughout their communities and the world.
4. Delivers an Opportunity to Educate
Your philanthropic nature may encourage others around you to donate to causes they care about. Seeing a friend or family member involved in charitable giving can excite others to find efforts they can support.
You might even get involved in a fundraising campaign for a specific organization, raising money and awareness about critical issues. These instances are an opportunity to teach others how a particular charity addresses the problem and ways in which a donation will help further their mission.
Donating to charity also sets an excellent example for children to follow as they age. Children innately enjoy helping others and will continue to do so as time progresses. This is a lesson on giving that only sometimes ends with monetary gifts, though. You can get into the habit of having your kids donate their old clothes and toys to another child, or commit acts of kindness whenever possible.
5. Encourages Better Financial Management
Many people take advantage of year-end tax deductions for charitable giving while simultaneously changing someone’s life for the better — a win-win. However, lowering your income tax is only one path toward better financial management.
Once you’ve committed to donating to charity, you can begin budgeting those contributions into your cash flow. Giving to charity means prioritizing what matters most in life and to you personally. You should look into your spending habits to achieve this.
When you save more money, you have more to put toward the essentials — including charity, investments and other activities. Money-saving apps can help. Some even search the web for available discounts for you and apply them automatically to your shopping cart upon checkout. Looking for the best deals can make a massive difference in your bank account and giving ability.
Of course, if you’ve long struggled with financial management, you might be paying up to a 20% annual percentage rate on credit card debt. Addressing what you owe before donating money you don’t have is best.
6. Fosters Community
People held onto one another a bit tighter as the world went dark during the COVID-19 pandemic. The wave of infections and tremendous loss of life had community members coming together to grieve and support one another — the effects were lasting.
The outcome of the pandemic shook many — particularly businesses that struggled to bounce back from lockdowns. Donating to local charities is an excellent way to strengthen community ties, from neighbors to strangers at the grocery store.
A donation toward local organizations is conducive to rebuilding and supporting people and small businesses in towns that have fallen in hard times. The outpouring of kindness brings everyone closer together.
How to Start Giving Back to Important Causes
You can do good by donating to charity, whether it’s a financial gift, services or old clothes. If you’re unsure where to start, charity recommenders like Charity Navigator and GiveWell provide unbiased feedback about an organization’s trustworthiness and impact scores — which charities make the most difference with donations. Like many, you could be concerned about where your money gets spent. If so, conduct comprehensive research to determine a particular charity’s reputation for transparency.
Although domestic charities are hard at work, consider giving to international organizations, too. Sometimes, your dollar goes the farthest in developing nations with worsening water, food, education, gender disparity and economic crises.
Of course, making donations to local charities is equally commendable. Suppose a local organization advocates for affordable housing to address rising homelessness in the community. According to the U.S. Department of Housing and Urban Development, there were about 582,500 people experiencing homelessness nationwide in 2022 — a number that has increased since the pandemic. Your donation could help these organizations run effective campaigns, host fundraising events, provide resources and make calls for new policies.
Remember that socially-focused charities aren’t the only organizations you can donate to. Consider donating to environmental-focused or animal charities, too. Organizations like the Humane Society or another animal rescue group always seek donations to help save and care for animals. Others are involved in welfare campaigns, placing pressure on farmers and corporations to treat animals better.
You may also want to contribute to an organization combatting global warming and climate change. As people look to adopt eco-conscious behaviors and lifestyles, environmental nonprofits are making sustainability the norm.
Put Your Money Where It Matters Most
You can make a difference worldwide by donating to your favorite charities. Find a cause you’re passionate about and budget your money for things that matter most. As giving becomes ingrained in your lifestyle, you’ll reap the benefits of greater happiness and strengthened societal ties.
