Guest post: "We donate up to half our income - it's not just billionaires who can be philanthropists"

[MumsnetGuestPosts]

When my husband and I work out our household budget each year, one of our numbers looks different to most people's. That's because we've pledged to give at least 10% of our income to the best charities we can find. Most years we give more like half.

As a child, I was struck by how unfair it was that some people didn't have their basic needs met, and I wanted to do my part to change this. When Jeff and I met at university, we knew we wanted giving to be an important part of our lives together. We've intentionally kept our spending low, even as our income has grown, so we're able to give. We don't think money is the only way to help, but it seemed like a good starting point to us.

Of course, things were simpler before we had two children in two years. But even after the arrival of our daughters, we've found that we've been able to stick to our giving plan. We knew childcare would be our biggest expense, so we saved in advance for these first few years when care is most expensive. And we've tried to keep our tastes simple, buying clothes at charity shops and visiting family rather than hotels for holidays.

It helps that we don't feel alone. In the early days, we didn't know anyone else who made giving a major part of their budget. Then we discovered Giving What We Can, a community of those who choose to give at least 10%. We've been happy to find friends there (including other parents) who also want to use their money to leave the world better than they found it. We're glad it's not just billionaires who can be philanthropists, but nurses, teachers, engineers, and civil servants.

People sometimes ask what our children will think of our lifestyle as they get older, and whether we'll encourage them to adopt it too. We don't want to push them too hard and make them tight-fisted as a way of rebelling. We want them to see sharing as a normal part of life. Giving has brought us great satisfaction, and we hope they'll see that and be shaped by it.

The research on what makes people happy points to personality, health, and social relationships as the biggest factors. Beyond a certain point, money doesn't do much to give you more satisfaction. So we try to prioritise relationships with family and friends rather than acquiring more stuff. We hope that by keeping our family's needs small, we'll help our children learn what's actually important.

Over the years, we've put more attention into where we give, and not just how much. We don't want to give to just anywhere that sounds like a good cause - we want to get the most for our money. So we try to find the most effective charities we can.

We've found the recommendations of the charity evaluator GiveWell incredibly helpful (we've been fans of theirs for years, and since last year I've been volunteering as a board member.) They're very picky about what they recommend, combing through different interventions and organisations to find the ones that have the best evidence behind their work. Much better than the days when I chose charities more or less at random, hoping they were good!

GiveWell's top recommendation is the Against Malaria Foundation, which provides mosquito nets in places where the disease is common, and we've been happy to donate there. Malaria primarily affects young children, and it's one of the world's top killers of children and pregnant women.

I can barely think about what it would be like for our family to lose one of our daughters, or to have lost me while I was pregnant. It horrifies me to know that this happens to families every day, and that it could be prevented by something as simple as mosquito nets.

I love knowing that my family can help other parents keep their children healthy. There's nothing else I'd rather do with the money. There's nothing we could buy ourselves that would mean as much as this.

[slightlyglitterbrained]

Didn't come across as smug to me, in fact has made me think I should get some direct debits organised, along with better organising our finances/savings in general. GiveWell sounds like a useful tip.

Would do DP good I think - he's always looking wistfully at stuff other people have and whinging about not being rich.

[slightlyglitterbrained]

WittyPutdown That's interesting - what would you say is different between US and UK?

[WittyPutDown]

Slightly. Its completely anecdotal but I found that people were more brazen and 'boastful' about their charitable donations and that there seemed to be less grass roots volunteer work going on. The problem with my observation is that naturally I would hear all about the more 'flashy' type of charitable endeavor. There also seemed to be more charitable activity associated with religion specific charities where you could only access the charities support of you were a particular religion. I worked for a literacy organization for a few years and a young mums organization. They were small local and much needed charities but seemed to lack the number of volunteers that you would get in the UK.
I can't google at the moment but I'm confident in saying that the Uk give much more personal pp charitable donations than the US.
There are tax reasons for giving to charity in the US and Canada. There was a massive charity tax scam involving huge amount of money in the Montreal area a few years ago.

[jojo2916]

That's amazing most people don't realise how lucky they are to live somewhere as affluent as the west and using your money to help others is so much better than new clothes etc this is so inspiring

[havalina1]

Brilliant. Love this post. I don't find it in the least bit smug.

[Wordsmith]

Interesting that it is a US couple. As others have said, charitable giving/philanthropy is much more common over there for people who earn a lot of money. They get tax incentives to make charitable donations - so you could say they are avoiding paying tax that over here in the UK could be used to fund the things their charitable giving is funding. Taxes are lower generally and there is less state aid for jobless people, sick people etc. So rich citizens with a social conscience do tend to pitch in and donate. Personally I would rather that taxes are used to fund some of the things that charities are paying for in the US, but that's not to denigrate in any way people who do donate. I just think society as a whole has a responsibility to look after its less fortunate members and that is what taxes are for (or should be, along with roads, schools and so on).

Having said all that, if I was earning as much as the couple in the articles BombadierFritz posted, I reckon I would donate a sizeable portion to charity, too. It's great that they give so much to help others rather than buying flashy cars and holidaying by private jet. If you look at their published donation report for last year, you'll see they still got to keep around $150,000 - well over £100K at today's rate, so they're not exactly denying themselves a decent lifestyle.

Those of us who live on a more average salary and give a few quid where we can should not beat ourselves up about the fact that rich people give more - just be thankful that they do, but even more thankful that the UK's social security system, creaky as it is, should mean that the need is less over here.

[Salutarychoring]

I think this is all well and good with the proviso that you have enough savings to support yourself in old age and/or should one of you suffer ill health or , god forbid, a disabling accident.

State provision being what it is, I think we will all need far more savings for old age than we currently realise.

I have a close family member who is always giving money away to charity but then gets in to difficulty herself and then asks family members to bale her out, which really isn't fair.

Also, I'm afraid I wasn't very keen on the we visit "family rather than hotels for holidays" bit of the post. It depends on one's family I suppose but I wouldn't dream of imposing like this all the time.

Again, we live abroad, and have certain family and friends who come and stay who take advantage a bit tbh. We like to think of ourselves as generous hosts and we love seeing certain family members, but over the years you get to know the ones who bring wine, who help, who are generally considerate and others, who frankly just take the Michael.

Sorry to sound so mean spirited but I believe you help society the most if you can (if humanly possible) support yourselves in all things and not rely on family and friends or the state (if at all possible of course - for some it simply isn't).

With the above exceptions, I think it is admirable to give away a percentage of your earnings and a great example to your children. My parents gave away a percentage of their earnings their entire lives. And they worked very hard in order to be able to support themselves and in addition, help others.

[OlennasWimple]

I agree with pp that the attitude to charitable giving in the US is completely different to in the UK. Not so much that there's less grass roots activity (there's plenty of that, including what could be termed "Big Society" activity, such as running libraries, elderly support services, mentoring disadvantaged children), but there is an expectation that everyone, particularly those with a good income, will donate to charity. Our accountant was very surprised at how little we claimed on our tax return, but we tend to give via our time rather than our cash (because we don't have a lot of spare cash to commit to charitable giving at the moment).

MNHQ - I'm curious why you thought that this would be a good guest post for a mostly UK-based audience?

[Gini99]

This is a very interesting post and I think the question of making sacrifices on behalf of the children is particularly interesting. From what I can see, the OP has a baby and a 2 year old (www.jefftk.com/p/spending-update here) so not yet at the stage where this is likely to have had much impact. I can see that teaching children some level of sacrifice for the interests of others could be a good thing e.g. we think we should buy mosquito nets for these people rather than an expensive phone for ourselves, but this post seems to go far beyond that.

For most families, the level of giving that this family have wouldn't just be about making small sacrifices but would be a complete transformation in the family's standard of living that could have a huge impact on the children. For example, is it fair to my children to decide to prioritise giving to others if it means bringing them up in a 2 bed flat in a run down area with poor schooling when I could afford a 3 bed semi in a nice area with good schools? What about cutting educational experiences for them (music lessons, exchange trips, travel) or giving to charity rather than saving for their future University expenses or housing deposits. You could argue that lots of children share rooms, have poor schooling etc so it would be luxury to prioritise a better home, school etc for mine over charitable giving. I'm not sure that the children would see it that way when they grow up.

This might well not be an issue for this family (I see they have a 5 bed house and very large income even after the giving) but the question of how far it is reasonable to limit the children's standard of living in order to give radically is an interesting one.

[Gini99]

whoops link fail here

[80sMum]

I'm a firm believer that charitable giving should be something that one does anonymously.

But, just out of curiosity, could you clarify, OP, whether you are referring to gross income or net income? It makes a big difference!

[juliawise]

To answer some questions:

We live in the US, where it's typical to give around 2%. (Giving What We Can has members around the world.)

I certainly applaud people who give in any form, and particularly people who find ways to give when money is tight!

About housing - yes, we've rented from my in-laws in the past. We're careful to save for ourselves and our children so we don't become a problem for someone else.

We're lucky to have a good income, and it certainly wouldn't be possible to donate as much as we do otherwise.

As for why I wrote the piece, I did it because I was asked to by an editor who thought it would be interesting. I'm not in this to toot my own horn (exposing myself to the comments of strangers is not actually much fun), but because I once felt very alone in this and I want others to know that there's a community of others thinking about how to give better. If no one speaks about what they do, it's easy to think no one is doing it.

[juliawise]

Hi 80s mum - it's gross income. My husband's a bit obsessed with pie charts and made this graph:

[Gini99]

Julia, thanks so much for coming on, I hope you don't regret it! I think a lot of people (me included) feel quite disillusioned with giving to charity given the high profile scandals with charities such as Kids Company (UK based) so your Givewell programme sounds really helpful.

It's a really challenging post and very interesting. I understand if you would rather not answer but can I ask what you think about the question I asked about limiting your own children's future opportunities in order to give radically? I am sure that you would always make sure that their needs were well met but what about limiting the extra benefits that they might get with an income your size. For example, if you felt your children were getting an OK education and their needs were being met at their state school but they would be far more stimulated and inspired at a particular private school would you allow yourself to spend that? What about all of the clubs and activities that they might enjoy but aren't necessary?

I quite understand if you'd rather not say but being countercultural is always more difficult when you're making decisions for children too.

[isthistoonosy]

I know pensions aren't charity! Saving onto your own pension prevents you needing charity later.

[WittyPutDown]

Julia. Do you let people that you know in real life know how much you give away? Doesn't that make things a bit awkward?

I'm not sure the 10 to 50% figure is that relevant as it would depend on what cash you have spare. I'd you are only spending a very modest 7.7% on housing and a modest 4.9% on other expenses then it suggests a very different picture to your average person living in the UK.

As for only paying 17% in tax, . That is really, really low.

[WittyPutDown]

I've just had a read of Jeffs blog. It's interesting. It seems very American and out there but I guess it gets people thinking.

I like the way you both are simply telling people what you do and why you are doing it but refrain from preaching and telling others what to do.

I still find it all a bit odd but I can't knock the fact that you are giving away so much money.

[Ericaequites]

Wealthy people should buy new clothes and give them to charity shops when worn, or just wear them out. There are people who can't afford anything but secondhand things. Although I am American, I find this extreme giving a bit odd.
Mormons, or more properly Latter Day Saints, are encouraged to give 10% of gross to their church, even from unemployment or disability benefits. Even their young missionaries are meant to fund their own missions, living very frugally and often without medical attention. I don't agree with this. The Church is very rich, and owns lots of real estate.
I prefer to give locally to a support organization for young LGBT folk, a local animal shelter, and friends and relatives who need help. Most large charities in the USA have high overheads, and call constantly for more money.

[MargeryFenworthy]

We are very high earners and donate generously. It's very important to us. Also have my own small charitable initiative and do as much as I can around this.

[IfYouCantSeeMyMirrors]

Julia. You think extremely hard about your position in the world and how best to help in a wider sense and this is obviously great. But - your post here will make an awful lot of people feel like sorry, guilty failures. Most of us are simply nowhere near the top of the income tree, as you are, and for us, it's much less a case of bestowing our richness from above than it is about simply living well within our local communities. We don't take high salaries, but in our failure to do so, we're not shafting poorly paid workers further down the tree. We might 'keep' our own cash, but in doing so, we can then use it within our own community, be that on a very local or a national level. I suspect we find that we have more time to volunteer at a grassroots level too. I wonder if you would consider an even more radical alternative: ditch the big house - live a genuinely small life, amongst some of the people in the USA your charity is helping. Work at grassroots level, rather than from above?

[icanteven]

I think that the OP was poorly edited/guided by Mumsnet in what to include, because it's a very misleading post and depicts a lifestyle irrelevant to most Mumsnetters, as most of us in are in the UK and earn less than £280k a year.

By the standards of many of the people reading this thread, the OP is exceptionally well off. Last year their combined income was $314k, and if they continue on their current trajectory, this year it will be about $370k - or £282k GBP - an unimaginable sum for the vast majority of Mumsnetters, even the top earners here.

Out of that huge income, their tax is only 17%, compared to 40% here. If you earned £282k in the UK, your tax bill would be £113k (their tax bill in GBP is £47k), leaving them with a net income of the equivalent of £235k per annum. So they give half away? Well, yes - I'm sure most of us would be ecstatic with a disposable income of £117k a year!!

The OPs' title is "Guest post: "We donate up to half our income - it's not just billionaires who can be philanthropists" - no, maybe you don't have to be a billionaire, but quite clearly you DO have to be extraordinarily high earners with great healthcare and living in a country with very little tax.


JustineMumsnet - with all respect to the OP and the impetus behind this post, would it not have been better to contact Giving What We Can or Effective Altruism to ask them to find someone to write a guest post who has a lifestyle that Mumsnetters can relate to, so that we can see how Giving What We Can could be realistically incorporated into our lives, bearing in mind that the average salary in the UK is £26.5k and house prices are 7 times that?

[BoxofSnails]

Why don't you just join the church then? A massive, worldwide organisation of individuals many of whom have very little, and yet who are encouraged to give at least the first 10% (not just if they have it left over) to 'the poor, the widow and the alien'. Silently. Without trumpeting about it.

[cestlavielife]

Many people spend much greater % on housing. .
It s laudable but actually if you can afford hotels and new clothes then spend the momey as you paying the minimum wages of shop.assistants and hotel cleaners...

Also visit some hospices as they are not "sad" places tho there is a lot of sadness there...

Giving time is also as valuable as money. Supporting an older person or disabled.child...giving a parent of a.disabled.child a break...

[icanteven]

Giving time is also as valuable as money

Actually it's usually not.

Part of the angle that Effective Altruism/Giving What You Can has (I'm not sure how explicit they are about it now) is that a graduate with a degree in finance (for example) can make a FAR bigger impact by getting a great job and donating 10% of her income for the rest of her career than she could by giving the parent of a disabled child a break, or by volunteering for a year abroad.

If she hits six figures (and the EA people are primarily targeting high earners, or potentially high earners, not not of us scraping along) then her annual donation of £10k - or if she earns as much as the OP & her DH - £28k - could go towards the salary of a person whose job it is is to provide respite to parents of disabled children. Or the salaries of 5 people providing respite to parents of disabled children in Bihar.

The top "value" charity on GiveWell is the Against Malaria Foundation, and according to GiveWell's figures, the cost per life saved is $3500 USD (they provide nets to prevent malaria). So £10k GBP is nearly 4 lives saved per year, for let's say 25 years of working = 100 lives.

Effective Altruism's point is that pledging 10% of your salary will save more lives than volunteering your time, unless you have very specific skills.

[cestlavielife]

Point taken... but it also underlines that spending on hotels/shops if you can afford it pays others wages too.

And also that this is aimed at high earners..
Who won't miss 10 k if they have another 90k to live off annually.