Turns Out Giving Does Make You Wealthier (and Happier)

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

I recently asked whether or not giving makes you wealthier. Turns out it does (makes you happier too -- and boasts lots of other benefits as well.)

This piece details a series of studies from a professor at BYU. It's a long article and you can get into the details if you like, but I'm simply going to cover the highlights. We'll start with what he initially found when crunching some government data:

I worked for months on my computer in my darkened office. My conclusion was, sure enough, that when people get richer, they tend to give more money away. But I also came up with the following counterintuitive finding—that when people give more money away, they tend to prosper.

Specifically, here’s what I found: Say you have two identical families—same religion, same race, same number of kids, same town, same level of education—everything’s the same, except that one family gives $100 more to charity than the second family. Then the giving family will earn on average $375 more in income than the non-giving family—and that’s statistically attributable to the gift.

What follows is funny (in a way.) He said he didn't believe the results so "I did what college professors always do in this case: I got rid of the data." Ha! Sounds like many of the studies I read were done by people like this. :-)

But our researcher kept on:

I ran the numbers again and looked at volunteering. I found the same thing: People who volunteer do better financially. I ran the numbers on blood donations. Think about that—giving blood. You’re not going to get richer if you give blood, are you? Well, yes, you are.

Good for me. I just gave blood the other day. ;-) He goes on -- now from a Christian POV:

The more I ran the numbers, the more I kept getting this crazy result. But still I refused to believe it. In desperation I finally went to a colleague who specialized in the psychology of charitable giving. “I’m getting this result I can’t understand,” I told him. “It doesn’t make sense. It’s like the hand of God or something on the economy, and I can’t believe it’s true.”

“Why don’t you believe it’s true?” he asked me. “You’re a Christian, aren’t you?”

This shook me a bit, but just for a second. “Yeah, but I’m also a social scientist,” I shot back. “We’re not supposed to believe those things. I need a more earthbound explanation.”

“Well, I’ll give you one,” he said. “We’ve known this for 30 years in the psychology profession. You economists— you worry about money all the time, and money is boring. We worry about something that people really care about—the currency by which we really spend our days—and that’s happiness. We’ve known for 30 years that people who give get happier as a result.”

Giving makes you happier too? Yep. We've already covered this.

Going on -- more benefits from giving:

People who give to charity are 43 percent more likely than people who don’t give to say they’re very happy people. People who give blood are twice as likely to say they’re very happy people as people who don’t. People who volunteer are happier. You simply can’t find any kind of service that won’t make you happier.

Studies show that when people give, it lowers their levels of stress. People who do their jobs with less stress tend to be more productive and successful. Throughout our lives, if we can find ways to relax, we will profit from it.

The study concludes that when people see strangers giving charitably, they recognize a leadership quality in those strangers. If people witness you as a giver, they will see a leader. Servant leadership is a secret to success, whether you’re looking for success or not. When people see you giving and cooperating and serving others, they will see in you a leader, or a future leader, and they cannot help but help you.

Many other studies show that givers have better health, that givers are better citizens—it goes on and on. The bottom line is this: Givers are healthier, happier, and richer in this country—and probably around the world. Giving creates stronger communities and a more prosperous nation.

And some info that fits well with the subject I write about every Sunday:

Who gives the most? And who’s getting this wonderful benefit for themselves and their communities?

The number one characteristic of those who give in this country is that they practice a faith. Of people who attend worship services every week, 91 percent give to charity each year. Of people who don’t attend every week, 66 percent give. This translates into millions of people who are healthier, happier, and more prosperous than their neighbors, and it charts back to their religious experiences.

What do the data tell me as a Christian man? They tell me that people who take their faith seriously are the beneficiaries of giving because we tend to give a lot. We’ve been taught to do what is right, and we are reaping the reward.

He then asks how we can help other people give more today and suggests starting by working to dispel some myths about charitable giving. These are:

• Myth number one: Giving makes us poorer.
• Myth number two: People are naturally selfish.
• Myth number three: Giving is a luxury.
• Myth number four: You will hear in the coming days and weeks and months that if our country were doing what it should be doing for people in need, then we wouldn’t need private giving, that the government would be taking care of people who need it, and that we would not need you to step in to provide for others. I am here to tell you, having looked at the data, that the day the government takes over for you in your private charity is the day we get poorer, unhappier, and unhealthier.

And he ends with this:

I promise you that this really works. Either because of God in heaven—or because of our neurochemistry. But it really works.

From my personal experience, I can say that when my wife and I started giving we saw the biggest increases in our income. And as we gave more, we made more. Kinda interesting, huh?

Comments

[Concojones]

First of all: awesome post!

Second, and I've said this before: I'm really tempted to believe this nonsense (haha). Intuitively, it makes sense to me. It seems like giving brings out the best in people. I believe it makes you a better person in all areas of your life, including career. I've actually experienced something similar: people who are eager to contribute at work even if it's not in their job description (which is a 'giving' mindset, right?), get noticed by the higher ups, who show interest and may ask you to come work for them. I've seen this happen around me and happen with me.

Third, this professor's statistical 'proof' is laughable. It seems like he's confusing correlation with causation. In plain English, consider this example: proximity of a country to the sea tends to cause more rain, but more rain does not cause proximity to the sea. Both variables may go together, but that does not imply one causes the other or vice versa (they may both be caused by a third factor). Likewise with wealth and giving: they seem to go together, but there's still the question of why.

[Shaun]

Ha! I love it. It really makes sense. Giving changes your state of mind which prepares you better for personal finance and business decisions. Charity begets fulfillment, and fulfillment begets prosperity.

[Mike]

While it is true that this forum was given at BYU, Arthur Brooks is not a BYU Professor. Just thought it needed a little clarification. http://arthurbrooks.net/author.html

[a3]

Very interesting.

It makes sense to me because people who give, volunteer, donate (etc.) end up being more connected to others and to their community--and these connections facilitate success in many ways.

Thanks for the great post!

[Noadi]

As we skeptics say "correllation does not imply causation". This reminds me a lot of the studies that say that kids who eat dinner with their families get better grades. It's far more likely that the same habits that lead to giving are likely to lead to higher income and better money management just like a good family life is likely to lead to both eating dinner together and good grades.

[john78]

So, someone who refers to themselves as a "social scientist" can't find the proper causal relationships between giving and wealth...and then falls back on "God did it." That's lazy, not admirable.

Two words for you:
Antoine Walker.

Two more:
MC Hammer.

Both supported (gave) between 70-200 people during their careers. Why are they not billionaires? Sure, Hammer will give you some sap story about how he's richer "in other ways" but it doesn't wash.

Here's a thought... What if giving didn't make you wealthier? What, instead, if it actually made you poorer? Would you still give? How can people believe in an all-powerful God and then not think that she/he/it would be smart enough to see at their real reasons for helping others. If you're helping because you believe it will bring you more wealth, then that is the epitome of being selfish. The fact that others benefit is a side bar.

Can't we be honest with ourselves instead of trying to find justifications for the actions we already follow? Or, is that asking too much in the modern world?

[HaleyBarbour]

Mississippi consistently is the most generous state per capita in the nation, but continues to the be one of the poorest states in the union.

[ChristianPF]

"From my personal experience, I can say that when my wife and I started giving we saw the biggest increases in our income. And as we gave more, we made more. Kinda interesting, huh?"

Yep - same story on my end as well - there must be something to this sowing and reaping thing...

[guinness416]

I dunno, I've given more to charities I like as I've gotten older, but even if I'd given less I'd still be (materially) richer and earn more. Because I'm older, wiser, more experienced, etc etc etc.

[Concojones]

@Noadi: great example! Still, we can't discount the option that giving teaches you the mindset that leads to financial success.

@John78: nice counter-examples, but unfortunately they prove nothing, either.

@FMF: "From my personal experience, I can say that when my wife and I started giving we saw the biggest increases in our income. And as we gave more, we made more. Kinda interesting, huh?"
Do you still remember what made you make that decision? Could there have been a change in mindset that not only led to giving but also to financial success? Is there anything else in the context that might be relevant?

[Patty]

I must say it is true in my life so far. I volunteer continuously and I have seen my income continue to grow. When I was 'too involved" in my career, I wasn't as happy or seeing the fruits of my labor.

Volunteering and giving was part of my growing up. My parents instilled that we should help out whenever we could. I even remembering having contribution envelopes for us kids at church where we could put a few cents in it each week.

Then to anyone - Wealth isn't just measured by the $$'s in the bank? Just a thought

[FMF]

Concojones --

The biggest thing that changed at that point was that I decided that I needed to do what I felt was God's leading in my giving. Started tithing at that point and never looked back.

So yes, there was a change in mindset/action and I think the two of them worked together to make a huge difference.

[Beastlike]

Lately, my wife and I are becoming much more involved in the church.... Before, I never really saw the importance of tithing since I thought we "needed" the money to pay down the house. We typically gave .3% each year to the church and this year we stepped it up to about 3%. Not close to 10% yet, but a decent improvement over the past. We hope to at least double it each year until we hit 10%.
Even if we don't get wealthier, I know it's the right thing to do and to make it easier, I just have to keep reminding myself all my money is God's to begin with!!!

[Lucy]

I'm skeptical that giving money away can make you richer - I agree with the people who say it's correlation but not necessarily causation.

Nevertheless, I give money to charity each month because it makes me feel like I'm contributing something small to the world, when often I feel a bit useless in the greater part of my life.

I use a website called www.betterplace.org that makes giving to charity feel a bit like shopping. It's become my monthly treat on payday to spend a while looking and choosing which charity to donate to. But I'm living in Germany and I think it's a German site. I wonder if there's something similar in the US?

[MBH]

Sounds like prosperity gospel to me.

Try this: FACTS, STATISTICS, NUMBERS AND REPUTABLE SOURCES.

Just because a person can simply say something doesn't make it true.

That is in no way to say that giving is bad but it should be responsible and within reason.

So which "God" will I "profit" from most? Vishnu? Jesus? The God of the Mormons, 7th Day Adventists, Jehovah Witnesses, Catholics or Protestants? Just curious.

Next time, just stick to finances and numbers... *not* theology.

In other words, don't insult your not so religious readers.

[Living Frugal]

I'm not sure why this happens but I believe in some kind of Karma 100%.

I'm not decided on my religion so I wouldn't simply attribute it to gods good work but it's as viable as any other idea here!

In some ways it could just be as simple as you feeling better about yourself, becoming more econfident and therefore excelling at what you do!

Thanks for a fantastic post. It's great to see some stats on this kind of stuff.

Forest.

[Joe Ciskey]

I would heartily encourage everyone actually read the actual article being cited, he does go into a bit deeper detail. FMF cut it down for his post. It would seem to address at least a few of the comments others have made.

For the skeptics: while yes, you do have to be careful not to conflate correlation with causation, why do you think that a fellow skeptic who's also a trained professional would fall into that trap, and not acknowledge the possibility that his conclusion is correct? The article itself doesn't give enough information (for reasons of scope and audience, obviously) to make a definite conclusion as to whether his methods were flawed.

Also, please don't assume that "giving increases your wealth" is saying that God will drop a bag of money in your lap whenever you give money to X, Y, or Z. It's simply stating that giving results in an increase to your wealth, which can come from any number of sources, not the least of which is simply a more positive attitude and outlook.

I personally find it harder to accept that a trained economist who doesn't want to believe the results made such a large mistake as "correlation => causation" than to accept the premise suggested by the data, which has a logical correlation to human behavior and neurochemistry, as well as anecdotal evidence from at least two sources on this very page (and countless others elsewhere). I can't claim to be unbiased, but I've spoken to enough people and heard enough accounts of others who have improved their personal finances tremendously through an increase in giving that I can't fall on the skeptical side of this one.

[Susan]

I give to a few organizations every year but mostly to my two favorite charities, my adult children. It certainly makes me happy because I know the gift is very helpful for them to maintain a viable lifestyle and progress in their lives. The wealth I experience is my love for them.

[Koatan2]

I have read the full article printed on "BYU magazine" last year (I am a BYU alumni), and I starged giving more after reading the article. I definitely feel much happier than before I started giving, and I feel it influenced my attitude very positively. I also became more appreciative for what I have now more than ever, and that is the biggest benefit for me. Koatan from Tokyo, Japan