The Millionaire Within: Give Some Away to Charity
Give away money? Isn’t that counterintuitive in a world that broadcasts messages to save, invest, and grow your wealth? It’s about “capturing” assets, not giving them away. Right?
Charitable giving is not just about sending a donation to the Red Cross after a disaster or to the Salvation Army at Thanksgiving. Most of you know that. And those of you who are working with planners and fee-only advisors already have estate or legacy plans designed and implemented that include strategies like charitable remainder trusts (CRTs) and other products that comprise alphabet soup, like CRUTs, CRATs, GRUTs, and GRATs, for maximum benefit to you and your beneficiaries.
These days, the word “philanthropy” no longer means just the likes of Warren Buffet, Bill Gates, or other high-profile or affluent individuals giving away millions of dollars. Rather, it means a way of life and a way of thinking and believing; it is the art of teaching children to live life with compassion in their hearts, educating the poor and underprivileged to help them help themselves, and so much more. It's not necessarily about the wealth; it’s about giving meaning to your wealth. It’s about where your heart is, what you are doing for others, and how it makes you feel. It's what life is all about. It’s about the “Millionaire Within.”
Why Philanthropy Is a Hot Topic Today
According to philanthropic planners and fee-only advisors, philanthropy is becoming increasingly important for various reasons, due to the substantial wealth created in this country in recent years. The affluent now have more than they need for their expanded lifestyles. Also, the baby boomers who have created and inherited wealth are getting to the age where they are beginning to think about “giving back” to the society that has been so good to them.
Many believe there was a systemic change in our country after the 9/11 tragedy, which resulted in individuals and families becoming more “grounded” and appreciative of life and what was really important. It's also due to the enormous wealth in our country today—many people who never dreamed they would be millionaires now are. We are now seeing classes of millionaires; just as there were lower-, middle-, and upper-class individuals and families when we were growing up, we now have the lower-, middle-, and upper-class millionaires. The combination of the wealth, the realization and energy around what is really important in life, and an ever-increasing global awareness of the significant differences in lifestyles here in the U.S. as compared to the lifestyles in most of the rest of the world (e.g., poverty, health crises, illiteracy) has created a collective consciousness about philanthropic work.
Transformational Philanthropy: Teaching a Man to Fish
Let’s take a look at philanthropy outside of the traditional definition, which is primarily reactive philanthropy. By definition, this is an immediate need and a reaction by the donor to a request. On the other hand, transformational philanthropy is looking to “fix the cause.” For example, a hospital may have a neonatal unit that needs to provide charity care to young infants with poor nutrition, or facilities may be starting educational programs on nutrition in certain communities, with visiting nurses providing education on general healthy lifestyle practices —they would need both traditional and transformational philanthropy assistance. There is a need for the hospital unit, for example, to take care of the babies when they are born at two pounds, but there is also a need to slow down unplanned births through education.
It’s important to understand the differences between reactive and traditional philanthropic giving, but it’s just as important to know about transformational philanthropy because it usually inspires you to do some of both. Your advisor can explain to you what is really going on in the world of philanthropy today. Philanthropy is a matter of the heart, and it will bring you a reward like you’ve never known before.
