Merriam-Webster defines philanthropy as “goodwill to fellow members of the human race, an active effort to promote human welfare, or an act or gift done or made for humanitarian purposes.” We have seen philanthropy work powerfully in our local community over the last several years but noticed something else about philanthropy that is equally important. Whether through a Donor Advised Fund, Family Foundation, or by simply writing a check, giving to causes you care about can help you and your family gain vital life skills.
Due Diligence
One of the first skills philanthropy teaches us is how to do our due diligence. Many givers will spend a substantial amount of time researching the organizations and causes they want to support. It’s important to not only prequalify a charity, but to also follow up to see how your gift was used.
Money Management
A long-term philanthropic goal can teach investment management skills to a family or individual. Many people desire to give continually and increase the amount they give to causes or organizations they are passionate about over time. Learning about and utilizing different investment vehicles can help families or individuals grow the money they want to give.
Budgeting
Determining the amount and rate of giving and practicing a “give first” mentality can teach important budgeting practices, including disciplined saving.
Combining money management and budgeting can allow a philanthropic individual to continually give even as they age. Determining how much money they can give each year while still growing their investments will allow them to continue to give more. With those answers, they can decide how much to give to each organization they want to support.
The Personal Impact of Philanthropy
Financial skills aren’t the only thing that can be learned through philanthropy. Some families ask each individual who is participating in philanthropic decisions to give a presentation to the group on why the family should be giving to a particular organization. Public speaking and presenting in front of a group of people can have many benefits, especially for younger individuals in the family.
Along with public speaking, each family member can learn how to make joint decisions with others and solve problems in a group setting. These skills are valuable to learn early in life but are also beneficial throughout your lifetime.
Above all, many of us make the decision to give because we believe it is important to care for others. Giving is one of the ways we can show we care about issues and create a culture that lifts others up and works together to solve problems.
Philanthropy teaches us vital skills that apply to both our financial and personal lives. By developing a thoughtful approach to planning your donations, you and your family can become better money managers and decision makers while doing your part to support the causes and organizations that matter most.
