Giving to Charity

Giving to Charity??

I’m a newbie here, so please don’t flame if this topic has already been discussed at length. I was approached recently by a charity who offered the convenience of donating using my VISA card. Most people think of credit cards as “money,” but I know they are actually a loan, which led me to my question: Can you justify giving away money borrowed money?

I have the goal to retire early, but I still have a modest mortgage, plus a small amount remaining on an auto loan. The car will be paid off in May, and the home is scheduled to be paid off before I retire.

I give a certain amount each month to a church and a couple of other good causes. While they are worthy recipients of money, does it really make economic sense to give money away when one has an outstanding loan? In essence, it seems that I am borrowing money to give away that I could be using to pay down my debts quicker. Shouldn’t you only give away money when you first do not owe any? Is it mean-spirited to view things this way?

Giving to a church could be viewed as a sacrifice, or obedience to God, but I do not see how you could construe giving to the local SPCA in the same way. I know the Bible talks about giving that has been interpreted in various ways about giving, but it also says “the poor will always be with you.” In other words, it is impossible for a person to try to solve all the world’s problems.

So, I am back to the question: can a person with FIRE as a goal justify giving away money when they have outstanding loans?

Regards,
Mike

[hocus]

Can a person with FIRE as a goal justify giving away money when they have outstanding loans?

I think the answer is "yes." I don't think it is healthy not to always be giving at least something to charity. I think it is too crimped a way to live to give nothing, even for a limited period of time.

That said, I have given a lot less to charity in recent years than I would like to be giving in years to come. I"m hoping to get my writing business off the ground within the next year or so. Once I have some money coming in from that, I expect to increase the charity number a good bit.

[Hyperborea]

Quote:

I give a certain amount each month to a church and a couple of other good causes.

Well, first I wouldn't consider the money that people give to their church to be charity. It's really not any different from the money that people pay to belong to any other social group such as a country club.

Quote:

So, I am back to the question: *can a person with FIRE as a goal justify giving away money when they have outstanding loans?

Second, whether you are saving for FIRE is not really an input here. It's not any different than saving for or paying for other life goals. What it comes down to is your own morality and ethics.

[unclemick]

Yes

Provided it fits your budget. That means credit cards/including interest as well as the other things.

I gave to United Way all during working years via payroll deduction.

Now - charity begins at home: exceptions 9/11(LA firetruck) and recently the Tsunami victims. Came out of discretionary funds.

[KB]

I think giving to Charity is a personal choice. When I was in debt and didn't make much, I gave very little to help others. Mostly because I had very little and 2 kids to support.

But as my salary increased and debt ended I started giving more. I give to Charities of my choice and to Single mothers who need a little extra help.

I think you need to make a decision that fits in with your personal choices and your budget.

[arrete]

Quote:

Can you justify giving away money borrowed money?

Only if you can pay off the whole balance the next month.

There are many ways to give. Perhaps you don't have the money right now. There are many charities that value the gift of time. It is sometimes hard to find a good fit, but believe me, when you have that experience can be very rewarding.

Note of caution. Even when giving time, charities always want more, mostly because the are desperate. You just have to learn to limit yourself (just say no).

I prefer local charities because I can see the results in my home town. Whatever floats your boat, though. We're all different.

Bottom line, I would give minimal amounts of money (perhaps to your church only) and if I could, become a volunteer with a compatible charity or other deserving group.

arrete

PS - you can't copy from Word with the curly quotes. This application makes them into funny numbers. You can fix that on your original post by choosing "modify" in the upper right of your post.

[Mountain_Mike]

Thanks for the responses....things to think about.

PS: Thanks for the tip about Word. I tried to Modify the original post, and it would not grant me access, even though I registered and logged in.

[gratefuled]

I'm more of a "think locally, act locally" type and I donate close to zero in cash to charities each year. I send surplus household goods to the Salvation Army, but probably not a material amount.

However, I give a lot of time...a couple of hundred hours in 2004, to the two (secular) groups I work with, and more than that in 2003. Both of these groups are local to the Boston area, so I can see the effects first-hand.

Without dredging up the old "basis in time" thread that was getting chopped around last month, I'm not sure where in the spectrum of "giving" this falls. I've found it to be something I'm comfortable with, and it doesn't hurt FIRE goals.

Ed

[brewer12345]

Personally, I don't see how your mortgage balance fits in here. Either you wish to donate some of your net worth or income, or you do not.

[Tadpole]

First, if your church provides charitable services, I think your tithe is charity related.

I am odd when it comes to charity. I don't like funds like United Way. Living near Baltimore, I prefer to give to groups providing after school, meals, shelter and other aid to the needy. Many of the churches and civic groups in the city are better at helping others and with less overhead than more organized big groups.

[BUM]

I was checking out at Home Depot yesterday and mistakenly got charged an extra 10 bucks towards the tsunami charity. The cashier asked if I wanted the chagre reversed.

Ahhh Jaa.



BUM :

[FlowGirl]

I think if charity were strictly an economic choice then most people would give zip. If charity is important to you and you are making good progress on your debt reduction then I think its reasonable to give an amount that fits your budget, even if still in debt.

Unfortunately most people who are paying off debts don't live a completely ascetic lifestyle. In light of that fact, I think that giving to a worthy cause is certainly more noble than splurging on a dinner out or the latest electronic gadget. I've even heard it suggested that charitable giving can increase one's motivation and fiscal discpline (Although I can't stand either of them I think Suze Orman and Dave Ramsey both have variations of this message).

When we were paying down debts we gave small amounts to a few charities that were important to us. Now that we can afford more we give X% of our paychecks to charitable causes. When we reach FIRE we will probably give less money and more time.

Bottom line - its a personal decision.