Human beings are hard-wired to be social, but that doesn’t mean we’re always great to each other. However, there are strong biological reasons why most of us feel good about helping others. Philanthropy is a natural response to having more than enough money to take care of yourself.
Of course, there’s a financial side to philanthropy as well. You can genuinely put your money to good use while receiving some financial benefits for doing so. So, if you like giving, you can benefit in more ways than the warm fuzzy feeling of giving. You can have your cake and eat it too.
In this article, we will go over the personal mental health and financial benefits of engaging in philanthropy.
What are the advantages of philanthropy?
First of all, as everything in our modern world is moving, money is moving with it. Philanthropy enables you to create a real social impact on the world around you.
Think of spending (or giving) money as voting with your wallet.
Money can be used for good or ill. When you use it for good, you are actively promoting and incentivizing a better world.
The world is a slightly better place when your philanthropy:
- improves education and healthcare
- alleviates poverty
- leads to any other positive outcome
For some, philanthropy is more about personal fulfillment of other types. You can push for changes in a way that aligns with your values, with your giving leading directly to more changes in that direction.
Whatever cause you feel is making the world a better place, you can support it in a material way that empowers recipients as well. For many philanthropists, legacy is a powerful driving force.
Beyond these basic advantages that lead people to philanthropy, it also benefits your personal life in many cases.
You get networking opportunities with like-minded people who share a common belief with you. This can result in more opportunities for learning, collaborating, and more effectively leveraging your resources.
What is one financial benefit of giving money?
Of course, we wouldn’t forget to talk about the bottom line.
Giving money may enable you to claim some tax deductions and other incentives. Many countries, Canada and the US included, provide tax deductions on charitable contributions.
Individual people or corporations that donate money to qualifying organizations can often deduct the donated amount from their tax returns. Their tax liabilities are reduced, and the resulting savings depend on the tax laws in your jurisdiction.
There are also some niche financial benefits that certain kinds of giving can lead to. For example, some businesses donate appreciated assets like stocks. They can then benefit from capital gains tax savings, avoiding capital gains taxes while getting a deduction for the fair market value of the assets.
Most other financial benefits are indirect, at best. The primary reason for giving should not be tax savings, as that alone won’t even benefit you that much. But again, think about the benefits that you can receive from things like:
- Business charity events where you can network
- Good publicity
- Attracting better customers and employees
What are the long-term benefits of philanthropy?
In a nutshell, social development, a better world, and a better reputation.
This is to say nothing of the good feeling of changing the world for the better in a meaningful way.
However, there are many philanthropic causes. Maybe you want to play a part in steering public policy and systemic change in a way that aligns with your ethics.
Or, you may want to just give the most downtrodden people in your area a chance. Philanthropy can lead to a world that is slightly more like the ideal vision of the world in your head with every dollar spent.
Legacy and inspiration for future generations is perhaps the longest-term benefit of your present-day philanthropy. It’s in all of our interests to live in a world where people are more involved in changing the world around them for the better.
Philanthropic values can help shape a more involved population that is proactive about solving problems and creating more equality and social trust.
Conclusions: What are the positive effects of philanthropy?
Philanthropy provides nothing but positive effects when it is conducted honestly and with good intentions.
You are simply contributing to institutions that are changing the world in a way that aligns with your values. So long as you understand your values and the way your money is being set to work, there is nothing negative to say about philanthropy.
In addition to the basics, individuals can benefit emotionally and financially from philanthropy. And why not? We are social beings who strive to feel good for using our power to create positive change.
Photo by Katt Yukawa on Unsplash
