Help a Reader: Giving Perspective

I recently received this email from a reader:

I have a question for you. Maybe not so much a question, as I need some reinforcement.

I take home $455 a week, after taxes and insurance and all of that. $125 a week automatically deducts into a money market fund (I am looking to move to Alaska in a year for graduate school, and want $4-5000 moving fund).  I'm grossly underpaid, but I figure I'm only 24 and have time to work hard and make a little money...it is important for me to start low and work up, as I've learned so many things by having to survive on so little money. I have a car payment, student loan (graduated two years ago), car insurance, cell and various other utility bills, I have a large dog and am a CSA member to save on organic vegetables.  I live in a rural area.  My employer pays my rent and housing utilities, which compensates well for my low pay.

I was thinking today as I was renewing my monthly donations to various organizations -- WWF, Polaris Project, Amnesty International and Greenpeace -- that I do not have a single friend that donates any money to charity.  Is it common for people to NOT donate money??  The amount I donate seems shameful (around $30/month) but it's really the most I can afford. It appalls me to see so many people that make more and do better donating nothing...I doubt the thought has ever occurred to them. What gives? Is the act of charitable donation as rare across the country as it is in my own life?

I figured maybe you could give some perspective. Over the past few years I've become kind of ashamed of the wastefulness and lack of financial smarts of people my age...I am hoping that the area I live in is not reflective of the wider population.

I responded to her but thought you all might want to as well. Any thoughts?

Comments

[Mr. ToughMoneyLove]

Some people who lack financial resources choose to give of their time and energy to help charitable organizations. I think this is entirely appropriate and sometimes better than giving money.

[MissPinkKate]

How do you know none of your friends give money to charity? Many people prefer to keep their charitable giving private so as not to use it as a way to act proud and better than other people.

[Cynthia]

I think giving time or money is important, but I agree that its not something alot of people find important.

I don't know that you should be embarrased about what others do, but I do think you have a valuable insight that your peers do not have.

Thinking of others besides yourself is a great way to keep things in the proper perspective. You are investing in others, but you will probably reap much more than those you give to.

[Moneymonk]

People donate because their hearts tell them to, it has NOTHING to do with how much money a person makes

[J]

Personally I think people should mind their own business about this stuff. There are many reasons people give or don't give. You probably have no idea what is really going on in their lives and judging them says more about you than them. Maybe they give and don't publicize it, maybe they are helping family members in need, etc. The self righteousness of so many people when it comes to giving really turns me off to the whole subject.

My own opinion is that many people donate to their church because they feel they "have to" yet a lot of that money doesn't really go to what I would consider "charity". But that is their own choice and I shouldn't get to judge them for it just as they shouldn't judge others if they choose not to do the same. There are many different philosophies about giving, just because you can't easily determine that they follow yours shouldn't give you the right to judge. I think the bible might have even said something about that somewhere, but what would I know I am just a heathen :)

[Bad_Brad]

I applaud the charitable giving.

I wonder why someone would spend extra money on organic vegetables. To each their own, I suppose.

I would be cautious about thinking "I am okay being underpaid now". You might be surprised how much your future wages are tied to your current wage. Any future employer you have is going to ask you for a salary history, and they are going to base your initial salary on what others have been paying you. So if you feel you are underpaid, you should speak up and if your employer doesn't step up, you should leave.

[Uri]

Why do you assume that everyone should donate a portion of their paycheck all the time? Does it make a difference if everyone starts donating 10 years after college rather than 5? You often can't tell if you'll need the money until you are older so I'm saving all my money now with the intention of possibly donating later. If it turns out that I didn't need the money, then I'll donate otherwise I'll use it for whatever purpose is more important to me (heart surgery or cancer treatment for example).

What other people are saying is basically correct. The donations of other people are no business of yours and passing judgment on others based on your expectation of what one should donate is a form of smugness. We shouldn't encourage people to donate so that they can be smug about it.

[Isabel]

I make more than you do, and I give less. I'm not proud of that, but I do have my reasons. Assuming you're asking a serious question, here they are:

1. I have a child. My first priority is making sure he is adequately provided for, including some savings for college. (Of course, I also want him to grow up with a good social conscience; so probably I will increase my charitable contributions as he gets older, in order to provide a good example. But he's pretty young right now, and I prefer to save for his future.)

2. I have a very insecure job (due to my field), and I worry constantly about losing that job -- especially related to healthcare. (I have a lot of health conditions.) This intensifies my concerns about not being able to provide for my son; see point #1.

3. I have no safety net beyond what I provide for myself through an emergency fund. My family is not in a position to help me if times get tough. Hence, I am a big saver -- not a big spender, and unfortunately not a great giver either.

4. I have worked for a non-profit organization before, and it was VERY poorly managed. Money was wasted in what I consider to be obscene ways. (Ex: The CEO of the organization made a habit of staying in the most expensive hotel possible whenever he traveled, which was often. Etc.) I am sure that most organizations handle their money more efficiently than that org did...but how can you know for sure?? You can't.

I donate maybe $200/year (give or take), which is really really bad. I know that. But I am more generous with my time. And as my son grows older, I will make a point of finding organizations that I trust, and donating both time and money to them.

[dogatemyfinances]

A lot of people don't talk about it; they keep it private. I think donating time and effort is often more valuable than money, anyway.

I'd watch the holier than thou with incomplete info.

[LotharBot]

Not everyone makes the same choices as to how much to give, what causes to support, or what charities they think are best for those causes. So please, don't cop an attitude toward those who make different choices; give as you see fit, and encourage others to do the same without being judgmental.

One thing you are right about: a lot of people, especially in their mid 20s, lack financial smarts. A lot of people live paycheck to paycheck, and have no idea how to save or invest or set up a budget. So no matter how much they'd like to give to charity, they're simply incapable.

[sylvia]

Find out first. Sometimes it's best not to give to churches that either explicitly or implicitly contribute to missionary terrorism overseas damaging world peace.

[Jess]

It's amazing how different people have different perspectives. I'm 23 and I make about 400$/wk but I get paid hourly so the occasional OT/etc helps boost my salary. I consider myself to make good money and I'm very happy with it. Not to say that I wouldn't like a raise, but still... Plus you get rent thrown in there, that's a VERY sweet deal.

Then again, I live in a low rent apt and I choose not to have a car (public transit in my area is great). I'm making my final student loan payment TODAY for a degree I never finished and to celebrate my debt free status, I've pledged to give 5% of my net salary per week to a list of charities that I've made.

Here's a Jewish scholar's opinions of the different level of giving just for perspective
http://www.consumerismcommentary.com/2008/05/15/maimonides-8-levels-of-charity/

[Tomcat1066]

Giving is something that should come from within and for no other reason and it should come in when you feel you're able to as well. The phrase "judge not lest ye be judged" comes to mind at this moment. It's great that you're able to pay your bills, put some money away, and still make donations to charity, but not everyone has that finance acumen to manage things that well. It's sad, but unfortunately true.

The thing is, do you KNOW what they're spending their money on? Perhaps they are trying to accumulate wealth now so they can give significantly more in the long run? Or perhaps there aren't any charities that they feel are worthy. Maybe they're supporting a sick relative, or socking away for an engagement ring or wedding. Sure, they may be going through their buck-wild stage as well and just blowing their cash on partying, but unless you take a long look at their finances, you'll never know where they're at or why they make the decisions they do.

And this says nothing of how many people give of their time because they consider that a more valuable resource to donate anyways.

[Strick]

I would say good for you for giving at 24, but since dogatemyfinances is the only one to point out the holier than thou attitude:

$2000 month after taxes with no housing/utility costs is akin to $3000 month after taxes (since most spend one third of take home on housing/utilities), which for someone single is like 4000/month before taxes, or $48K/year. People that make that much (and many have kids to take care like Isabel above) average giving $740/year. This is twice what you give. What you give ($30/month) is the average for someone who makes $15K-$20K a year (I think that is impressive that people who make that little give that much). Someone who makes half of what you do may be appalled to hear how little you give while you have an "extra" $500/month after expenses going to savings. They are as tired of hearing someone who makes as much as you do say you really can only afford $30/month as you probably are hearing people who make $100K can only "afford" $60/month. I'm not going to judge you (you likely have your reasons, like needing to move), don't be so quick to judge others.

There is a good chance your friends don't give, they're probably 24 as well and and still a bit self-centered (not selfish, just self-centered, because, as you say, they probably don't really even think about it). It'll change as they grow, good for you for beating them to it (or maybe they are embarrased to talk about it b/c they only give $60/month, so don't be too quick to judge).

[Jessica]

Ok, I think way too many people assumed I was judging others when I wrote this e-mail. I'm not judging anyone, so I am not sure why I am being told to "mind my own business." Last I checked, I could wonder whatever things I wanted to. My friends are all single, and work in the corporate world (financial services, insurance, etc). They do not volunteer or donate, as we've had conversations about this before. I was asking about what the trend is within my age group (early 20's). If I cared so deeply about what my friends were doing, I wouldn't be giving or volunteering either. I wasn't judging people based on income, or priorities, or whether or not they gave money or volunteered. Community service, charitable donation, volunteering and so forth all seem things that are lacking in my age group, as least as far as I have seen. That's what I wanted perspective on.

As for organic vegetables, I paid $500 for a weekly delivery of vegetables -- enough for a family of four -- from June through November. Not a bad price when you consider what people normally pay for food these days. We've canned and frozen a lot of them, so we're stocked for winter and we have not purchased a single vegetable since June.

And as for being paid crap, I'll be out of here in less than a year, and will be (a) a teaching assistant, with free tuition and hourly pay, or (b) working elsewhere with a significantly higher salary.

[Jessica]

Also, for the record, I make 33,875 a year, not anywhere near $48. I work 10 hours a day, 6 days a week, year round. I have one week paid vacation and a $1500 deductible on my health insurance. Just want to throw that out there. As I said I do not pay for housing, so that is a tremendous plus, but in return for free rent, I manage/supervise all of my company's employee housing units (repairs, maintenance, etc). I probably should've said that in the initial e-mail, but it doesn't really matter now I guess.

[Strick]

Sorry Jessica.

I read "It appalls me to see so many people that make more and do better donating nothing" as judging others, my mistake.

As for the 48K, I just meant your free rent is worth another ~$14K/year to go with your $34K salary (you've got to admit you're in a different financial situation than someone who makes $34K/year and doesn't have free rent/utilities). I in no way meant to imply you are not underpaid (its a shame that teachers are) and haven't earned the free rent (its obviously not just given to you).

[Jessica]

That comment was not really meant to be judgmental. I guess when taken out of the paragraph, it sounds much worse. I was more speaking more directly about people I've come into contact with throughout the years, particularly my closer friends. I went to a private school (leaning a lot of loans, scholarships and grants) and I guess because of the high tuition there were a lot of wealthier students there (who went onto wealth-generating careers). There are certainly plenty of people who make less than I do, but I guess I have mostly met people who have little interest in volunteering or donating time or money. It caused me to wonder how volunteership comes to pass, and what attracts certain people. Most of the people I've met while volunteering (I used to vol at a Rape Crisis Center) were doing it to meet mandatory community service requirements for college, or work, or whatever. My own parents don't donate or volunteer, either, so I haven't been exposed to it, really. I guess I was just wondering if what I saw (ie, not many people my age) was reflective of the larger population.

[Gino]

I'm 26, make very nice money and I barely ever donate money to charities. I've made some political donations this year (only $150 total) and am not religious so no money there. Giving money at all is certainly more admirable than what I've done and I would agree that it is uncommon for most people our age to donate regularly.

The low salary is really a problem though. It's not too bad now with the free rent, but being under paid can seriously screw you over. A former co-worker of mine received an offer to goto a better company, but given the fact we were underpaid (this was my former job, both of us are gone now) they gave him an offer that was pretty low in cash and when he asked for more he was told that their offer was already significantly better than what he was being paid currently and that he should take the offer. That is definitely the sort of thing that can pile up over time.

[Jessica]

I totally understand the concern with being underpaid. I work for a ski resort, for there are a lot of perks, but I am way below the industry average and am well aware of it. Unfortunately I started this job in September 2006, fresh out of college, and wanted to put two years in (I am a director in this job, despite the underpaying, so the title and job responsibilities mattered a lot, esp on a resume). This past Sept, 2008, would have been the logical time to leave: I however was offered housing this year in return for work in the complex, which will allow me to save up to move. I also had a bunch of other personal setbacks and did not want to leave my company two months before the ski season begins...this is a terrible industry, esp with global warming and the slowing economy and high gas prices, the real estate market and so forth. It's a difficult time to decide I'm underpaid and find a new job. I know what you are saying though. Ironically my company is offering me the right perks to enable me to save up and leave -- I would never relocate with no money in the bank.