
Home » Insights » Personal Finance » The Benefits of Charitable Giving
Melanie Guhit
CFP®, Financial Planner
Philanthropy can provide many benefits, from a sense of fulfillment and community building, to helping you minimize taxes.
The word “philanthropy” originates from the ancient Greek word “philanthropia,” which translates in English to “love of humankind.” Modern philanthropy has been around since the 16th century and has only grown over time.
According to Charity Navigator, a search engine for evaluating charities, charitable giving in the US hit a record high of $410 billion in 2017, which is larger than the GDP of some countries. Giving has increased every year since 1977, except for 1987, 2008, and 2009, where we saw declines.[1]
The numbers speak for themselves. People are giving to charities and they continue to give each year, both for qualitative and quantitative reasons.
For personal connection: You give to support causes that matter to you on a personal level. For example, if you care about animals, you may donate to an animal shelter. Or perhaps you have a close friend with health issues, so you donate to a charity that helps people with this particular issue.
For community support and building: Let’s say you’re concerned about the homelessness in your community. You make donations to support a new affordable housing project while volunteering your time to help see this project through. Along the way, you’ll meet others supporting the same cause and become a part of the community working towards a common goal.
For family bonding and family values: You may disagree with your family on a lot of things, but maybe you can agree on supporting a few causes. Gifting through a family fund each year can help bring your family closer together. You can also build a family legacy through the same fund.
For increased happiness: Two psychologists from the University of Chicago and Northwestern University carried out a study[2] to see if people saw any increase in happiness levels from giving away money vs. spending money on themselves. The study showed that giving away money led to more happiness over time.
While you may not associate taxes with giving, your charitable contributions can help reduce your tax burden. The IRS provides tax benefits for those who donate to charitable organizations, specifically to organizations with a 501(c) tax-exempt filing status. You can gift anything from cash, securities, real estate, art, clothes, books, etc. If you volunteer your time, the IRS even lets you deduct miles driven in service of charitable organizations (14 cents per mile).
Here are some other benefits to giving:
In essence, you end up gifting the full value of your stock and having a greater impact than if you had sold your stock first and then made the charitable donation. Read more about how you can use your concentrated positions to maximize your charitable giving.
Want to get started but not sure where to start? Here are some ideas to consider:
It’s important to vet charities to ensure they’re financial healthy, that they qualify for a charitable deduction, and to allocate donation proceeds in a way that leads to results for the organization. Talk to your advisor about your charitable giving intentions and how you can save on taxes while accomplishing your charitable goals.
Disclosure: The information provided does not constitute as tax or financial advice and is meant to give readers an introduction to charitable giving. If you want specific information on how you can save on taxes through charitable giving, then contact your tax professional or financial advisor.
[1] “Giving Statistics,” Charity Navigator.
[2] “Giving, Rather Than Receiving, Leads to Lasting Happiness: Study,” Huffington Post.
Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate, but is not guaranteed or warranted by Mercer Advisors. Content, research, tools, and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy or product made reference to directly or indirectly, will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
This article may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Mercer Advisors’ control.
with one of our talented wealth advisors who will help you connect all your financial dots
All investing involves risk, including the possible loss of principal. Portfolio management strategies such as diversification, asset allocation, and rebalancing do not ensure a profit or guarantee against loss. There is no guarantee that any investment strategy will achieve its objectives. Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning document preparation and other legal advice are provided through Advanced Services Law Group, Inc. Mercer Advisors Inc. is a Delaware corporation and is in no way affiliated with Mercer LLC, Mercer Investments, or the Marsh & McLennan Companies. Mercer Global Advisors Inc. is registered with the Securities and Exchange Commission and delivers all investment-related services. Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Terms & Conditions | Privacy and Security Center | Firm Brochure Adv Part 2A | Form CRS.
©2023 Mercer Global Advisors Inc. All rights reserved.
If you have questions related to our terms and conditions please email [privacy (at) merceradvisors (dot) com]. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.