How a Little Giving Can Change the World

image

 When I was younger, I thought that giving money was something nice to do.

That was a nice thought.

When I was in high school, I thought if I gave, I would get rewarded by God in return, sort of like buying his favor. God, did you notice I put a five dollar bill into the offering plate? After college, I thought I was obligated to give at least 10% of my hard-earned gross income.  I was not a cheerful giver.

Last year I met someone at the airport who changed my life.


If I’m not running to the gate, I’m getting greasy food (or walking around to find greasy food).

I don’t remember what burger chain bag I was holding or even my end destination when I ran into Chuck at a Hudson News stand. He looked like nothing special. He was wearing a plaid shirt–the type accountants wear–with gray hair. The wrinkles framing his blue eyes hinted at a life of stories.

His plain dress hid something special. I soon found out that he started a few companies, made some money, and gave some of it to charity and research. Actually, he made around $7 billion, then gave it all away anonymously.  

That’s Chuck Feeney. I met him by reading the book The Billionaire Who Wasn’t by Conor O’Clery. He made his wealth from founding Duty Free Shops and increased it through private equity investments. In 1988, Forbes estimated that he was the 24th richest American alive even though he’d already given it all away. His giving has substantially helped research and education, both domestically (his alma mater Cornell, or UCSF) and internationally (from Ireland to Vietnam) — and he wanted no credit for it. No names on any buildings. Not even a hint of acknowledgement from the beneficiaries. It’s impossible to quantify the impact his giving has and will mean to the world, but it’s beyond inspiring.

His story made me realize I wanted to make my life about making life better for others.

His book also illustrates how money can destroy relationships and how, sometimes, the giving away of money is as difficult as making it in the first place. 

4 Tips on Giving Wisely from Chuck

  • Give to organizations rather than individuals. Organizations have the scale and reach that can maximize your dollars invested. Giving to organizations can help lift entire societies.
  • Study organizations before you give to them. Chuck would send either himself or his people to secretly see how they operate before ever giving. Diligence is important.
  • Don’t meet the full ask. Chuck would always structure the giving as a matching grant so that the organization had to raise the other half. The money is a partnership, and participation from others created a greater sense of ownership from an organization’s supporters. Plus, outright solving an organization’s money problems can weaken their development culture: they become too dependent on you and don’t develop the habits to sustain themselves in case your giving ever goes away.
  • Don’t put your name on a building, even if you give the most. By leaving his name off of a building, an organization can raise even more money since naming rights are still available. So oftentimes even though Chuck had given the most money, someone else’s name would go on the building. Practicality over pride: that’s the essence of Chuck.

That’s how Chuck gave. But how do we give?

How We Give Now

Relevant Magazine notes the following:

  • Tithers make up only 10-25% of a normal congregation.
  • Only 5% of the U.S. tithes, with 80 percent of Americans only giving 2% of their income.
  • Christians are only giving at 2.5% per capita, while during the Great Depression they gave at a 3.3% rate.

In other words, we’re quite stingy. There’s all sorts of reasons for that, but they just basically boil down to variations on fear and greed. Perhaps if we knew what could be if we gave more, we would.

Relevant also notes that if all believers gave a minimum amount of 10%, there would be $165 billion extra. What could that do, you ask? Well–

  • End world hunger in 5 years. Cost: $25 billion.
  • Eliminate illiteracy in 5 years (which would probably help fight poverty as well). Cost: $12 billion.
  • Solve world’s water and sanitation issues (which would probably prevent many diseases as well, reducing medical costs). Cost: $15 billion.

There would be $100-110 billion leftover to help solve other problems.

Forget religion: what if everyone in America gave 10%? The total income of everyone in America is $9.0 trillion a year. So we’re talking about $900 billion in giving. If corporations joined in and gave 10%, that’s an extra $130 billion for a total of $1.03 trillion to help solve problems. Every year.

We could change the world.  We could make life better for billions.

What Could Be

It’s unrealistic to think that most Americans will give 10% of their income a year, but it’s also careless and unproductive to think that problems are too big to solve, so why even bother. 

But given that–what can be done?

Two Things to Drastically Increase the Power of Giving

  1. The velocity of giving: In economics, the velocity of money is one component in measuring the economy, and is basically how often money changes hands. The higher the velocity, the more robust the economy.

For example, let’s say the entire economy of New Jersistan consists of 3 people (April, Nick, and Laurie) and $100. If April, Nick, and Laurie each buy an aggregate of $100 of goods from each other once a year, New Jersistan’s gross domestic product (GDP) is $100. However, if they do it 3 times, then the GDP is $300. GDP increased 3 times because velocity is 3 times. See how velocity works? 

But what if you apply it to giving?

Let’s take Jimmy, who works at a good job that pays him $75,000 a year. If Jimmy gives 10% of his gross income, $7,500 is given and that’s where the buck stops.

Income Charity Companies Saving & Taxes
Jimmy $75,000 $7,500 $37,500 $30,000

But if we increase the velocity of giving, where each recipient of his $ (both charity and companies) also gives 10%…

In this example, there’s 4 rounds of giving, adding another $833 from charities and $4,166 from companies. So all together, Jimmy’s $7,500 of giving equated to $12,500 of impact due to velocity.

Income Charity Companies Saving & Taxes
Jimmy $75,000 $7,500 $37,500 $30,000
Round 1 $750 $3,750
Round 2 $75 $375
Round 3 $8 $38
Round 4 $1 $4
Additional Giving Rounds 1-4 $833 $4,166

It’s basically an upside down pyramid scheme that, instead of swindling people, helps them.

This model underestimates the potential because each $1 of consumption goes to a company that in turn spends it on employees or products/services from another company, which in turn spends it on employees or products/services from another company. Imagine if each employee gave 10% and if each company gave 10%.

Again, this too may be too much of a reach to expect charities and companies to give, so let’s look at what we actually can do that can make a material impact on the world.

  1. Creating a machine that gives half of its profits to charity. Let’s say our friend Jimmy still gives $7,500 to charity. Let’s also say that Jimmy created a side business–a machine that is relatively automated that makes a profit equal to his income. He gives half of what his machine makes, or $37,500. His machine increases his giving output by 5x–in other words, Jimmy has created 5 Jimmies!

Income 10% of Income Machine 50% of Machine
Jimmy $75,000 $7,500 $75,000 $37,500

We may never give like Chuck, but if we make a machine where we give at least half of the profits to charity or research, we sure can multiply our impact.

… but we’ll tackle those details in a later post.


Do you also have a big goal?

Imagine the possibilities!  What if you could invest in or partner with a group that works to restore the world?  Even better, what if you could create a machine generating enough income to not only improve your life but that of many others?  Think about all the lives that will be improved because of your investment!

Download my FREE 17-page Guide to Achieving Your Goals and you’ll get tips on how to clarify your goals, create a plan, map the future, and help get past times when you feel discouraged.  (You can preview it here.)  Start achieving your goals today!

Tired of waiting for “someday?”  You have a dream you’d like to come true, but going for it seems too scary.  So how do you do it?  This FREE 17-Page Guide is exclusively for subscribers. It will help you clarify your goal and develop a plan that will maximize your chance of achieving it.

 

We’ll also let you know as we come out with additional guides and tools, so you won’t miss a thing!

 

No spam ever.  Just awesome resources to help you achieve your goals.  

 

An email will be sent to the email address you provided. If it doesn't soon, be sure to check the spam folder!

 

6 Comments

Leave a Comment