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David Bach The Automatic Millionaire

David Bach, The Automatic Millionaire

Giving as Good as You Get

by David Bach

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Posted on Monday, November 19, 2007, 12:00AM

While many of us are making plans with our families and putting the final touches on our Thanksgiving menus, there are millions of Americans -- approximately 33 million, actually -- who don't know where or when they're going to get their next meal.

Did you know that more than 8 million Americans regularly go hungry? Or that 3.5 million have no permanent place to live?

Reflect and Be Thankful

On a global basis, the situation is even bleaker. Roughly one out of every five people -- more than 840 million -- is malnourished. Upward of 153 million of them are children under the age of 5.

I refer to these statistics not to depress you, but rather as a call to action. As we head into the holiday season, I'm asking each person who reads this to take a few moments to reflect and recognize all that you have to be thankful for.

Once you do, decide how you can make your life more meaningful while also helping to make the world a better place. The best way I know how to do this is to give.

Give to Get Rich

One incredible truth has stood the test of time: The more you give, the more you receive. This notion -- that the more we give back to others, the more comes back into our lives -- is practically a law of nature.

Over the years, I've seen firsthand that the "have mores" give more. I don't think this is a coincidence. People who give to help others in need -- by donating money, time, energy, or expertise -- live longer, happier, and wealthier lives.

But while money makes life easier, it can't always bring happiness. Real happiness comes from living a life of meaning. Winston Churchill once said, "We make a living by what we earn, but we make a life by what we give." I truly believe that.

Finishing rich is an important and worthy goal, but having a purpose bigger than money is critical to long-term happiness, joy, and personal fulfillment. Having nice stuff is great, but living a life of meaning is even better. With that in mind, consider the possibility that your life is meant to be lived with a purpose higher than simply accruing wealth -- and that purpose is to use your wealth to make a difference.

Finding a Worthy Cause

Find a charity that's important to you and make a donation this Thanksgiving. Ideally, you could aim to commit a percentage -- even if it's only 1 percent -- of your income on a regular basis. You can even make it automatic by having it deducted from your paycheck or checking account and transferred to a reputable charity of your choice. And remember, donating your time and talent counts as well. Volunteering is just as important as giving money. Everyone can afford to give in some capacity.

When deciding who and what to contribute to, it's important to choose an organization that doesn't use up your contribution on administrative expenses, but that actually spends the bulk of the money it collects on the people or causes it's supposed to be helping. Most experts agree that a charity should pass along at least 70 to 75 percent of what it raises -- meaning its administrative expenses should never exceed 25 percent. (I personally never give money to any charity until I've looked at their financial records.)

There are some excellent online resources that can help you figure out what groups deserve your support. Some of the ones I recommend include GuideStar, JustGive, and the Better Business Bureau's Give.org. Some additional sites that can help you get started to volunteer your time to help others include the Network for Good, VolunteerMatch, and Volunteer Solutions.

Housing Generosity

One of the many charitable organizations that's near and dear to my heart is Habitat for Humanity, an organization dedicated to providing decent and affordable housing to those in need.

As a board member, I had the pleasure of co-chairing and hosting the Habitat for Humanity gala in New York City. The event raised over $1 million for Habitat New York City. (You can check out some photos from the event on my blog.)

I opened the event with a powerful, life-changing poem long attributed to Mother Teresa, but actually written by Kent Keith. Called "The Paradoxical Commandments" (or sometimes "Anyway"), it's a beautiful, thought-provoking piece that complements what I've emphasized here.

With that in mind, I wish you and your family a peaceful and happy Thanksgiving.

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39 Comments

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  • JasonJ - Tuesday, November 20, 2007, 5:51PM ET  Report Abuse

    • Overall: 5/5

    I know they cannot eat them, but One Laptop Per Child (OLPC) is still going and is of the "teach a person to fish" school of thought. www.laptopgiving.org is the site. As well I must add that the time I have spent with Habitat for Humanity has brought me some of my most treasured time on this planet. Time and money. If you have both, give both. If you can only give one, do it that way. If you really feel you can give neither, maybe use some of your time that you are keeping to yourself for self-reflection about giving. Best to all.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 4:34PM ET  Report Abuse

    • Overall: 2/5

    With federal food stamps/cards easily available for the poor I doubt 33 million are going hungry. I believe the most worthy cause to give is for health technology research, diseases like cancer, MS, heart failure, Alzheimer's. These diseases have no cure or even effective treatments, and little real progress has been made in the last 20 years or so. If you get one of these diseases you are in real trouble whether you are rich or poor. If someone is reasonably healthy in this country of the USA, there is no excuse for them to be poor as there are lots of opportunities. So best to give to the cause that is the only real excuse for poverty which is serious illness. The big problem with giving to health research is all too often the money goes to administration, marketing to gather even more money, or research that is little value except to fulfill the requirements for someone's advanced degree thesis. So how to allocate the money to do some real good is a big challenge.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 4:01PM ET  Report Abuse

    • Overall: 2/5

    Most of these Yahoo Financial columnists are a joke. It seems that their articles always in some way end up touting how great they are and what they've done, or why you are an idiot for not buying their book. I would hope that if I had sold millions of books with little actual good information in them (I've unfortunately spent money to read Bach and Kyosaki's books), that I would be a little more selfless. Why not just contribute time and money to Habitat without posting it on your blog and national column (with a link to sell more books) that you're on the board and hosted a big shindig in NYC? Is your self esteem really that low that you really need to put this info out there to make yourself feel better, and to make everyone else feel like their not doing enough? I think all Americans are extremely lucky to live in a country where central heat and air, and LCD TVs are becoming the norm in every home, and employment opportunities abound if you desire to work. Too bad that the tax system penalizes us from even more economic success, investing (cap gains taxes), and innovation. Take this disincentive away and charitable giving would go through the roof. BTW, I give money and time to my local Boys and Girls Club of America -- man, i feel better after letting you know this.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 3:53PM ET  Report Abuse

    • Overall: 1/5

    I am one of the 33 million Americas who doesn't know where or when I will have my next meal. (brushing a tear off my cheek) In fact, if I get out early enough, I might head over to LeRoy's BBQ, but if my boss makes me work overtime, I'll have to pick something up later at the Burger Bucket. Anyway, I say take care of your own family first before you go giving it away to people you've never met.

  • Manoj - Tuesday, November 20, 2007, 3:42PM ET  Report Abuse

    • Overall: 4/5

    I hear different and conflicting stories and it all boils down to how much of you is generous. It all starts in the mind. You may be rich but not generous at all. I think they are the most stressed out people and have always something or the other to whine about. For an avg income person and 1-5% of income in good time is enough to make you feel good and generous. The more generous you can afford to be, less stressful you will be in this world. It is upto you.

  • Nick - Tuesday, November 20, 2007, 3:18PM ET  Report Abuse

    • Overall: 1/5

    Americans are the most generous people in the world and we should be happy with that fact. However, I would like to know where you get your figure of 33 million people in this Country going hungry. That is just silly. And please do not include illegals. They get more hand outs than anyone. We are allowing our great experiment in freedom to disappear as we bend over backwards to placate the invading forces. Give a man a fish and you feed him for a day, teach him to fish and you make him independent and able to feed himself for ever. Heard that one before?

  • ShaniqaP - Tuesday, November 20, 2007, 2:35PM ET  Report Abuse

    • Overall: 1/5

    Claims of Americans facing hunger are specious. "Hunger" is defined by the poverty mongers as missing a meal once every thirty days or something. "Facing hunger" means you might have missed a meal, but maybe you had one anyway. Throw in busy employed people who work through lunch and anorexic girls who would barf it up if you made them eat it, and you can see that the 8 million hungry Americans includes very many who don't need your charity. Don't ever give to telephone solicitors. If you didn't call them, politely say "NO!" and hang up.

  • groblix - Tuesday, November 20, 2007, 2:34PM ET  Report Abuse

    • Overall: 4/5

    Very good article and a timely reminder. If you really want to tackle poverty, though, individual charity must be bolstered by public policy choices that promote economic justice and opportunity.

  • Pam - Tuesday, November 20, 2007, 2:11PM ET  Report Abuse

    • Overall: 5/5

    Except....charity starts at home. Be generous to your family and closest friends, those who support you, nuture you and stand by you FIRST. Then charities as you see fit.

  • Ashok - Tuesday, November 20, 2007, 1:11PM ET  Report Abuse

    • Overall: 5/5

    Great article !! Greatness of America or for that matter any other country comes from its people who can use their mind over matter.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 12:56PM ET  Report Abuse

    • Overall: 1/5

    I can't remember who it is that sponsors the Olympics...Visa or MasterCard I suppose. A shark in the robes of a saint is still a shark. If you can't beat them, join them. Now, where did I put my fin?

  • William S - Tuesday, November 20, 2007, 12:37PM ET  Report Abuse

    • Overall: 4/5

    Very good advice for those people who make a life out of stealing from others. What better way to serve those laid off by your own selfish, self-absorbed actions than to give a few crumbs back to those most affected by your less than honorable actions? For all of those MBA's, CEO's, Wall Street criminals and their ilk, being able to donate a few leftover crumbs from the bread you stole (outsourcing, excessive stock options, executive pay, etc.) to those who were victimized by their relentless pursuit of money at all costs is refreshing. By giving back a few crumbs, you might even get your name on a building and further recognition to stoke the ego and further make you feel superior to others....what a great country!

  • Yahoo! Finance User - Tuesday, November 20, 2007, 12:34PM ET  Report Abuse

    • Overall: 5/5

    Great article, and I couldn't agree more. God already owns all the worlds money, including our own, so why not give?

  • g - Tuesday, November 20, 2007, 12:17PM ET  Report Abuse

    • Overall: 5/5

    Time-proven indeed ! Dave is 'right on the money' ! The best of the financial minds !

  • JohnF - Tuesday, November 20, 2007, 11:52AM ET  Report Abuse

    • Overall: 5/5

    It's nice to hear some of the financial advisers talk about things bigger than ourselves. Well written too!

  • John - Tuesday, November 20, 2007, 11:46AM ET  Report Abuse

    • Overall: 5/5

    Great article Dave - Stewardship as a way of life (giving of time, talent, treasure) is a great way for anyone to have a more fulfilling life for themselves and the people they help. I'm glad somebody was able to write about it in a public forum.

  • dcuke - Tuesday, November 20, 2007, 11:26AM ET  Report Abuse

    • Overall: 5/5

    This is by far the best article I have ever read on yahoo finances. Excellent job David! It is great to see that someone out there in the financial world is willing to see beyond themselves. We have so much in America. All to often we get caught up in our own selfish desires, trying to attain more stuff, while others suffer. When we can see past our own selfish desires and realize that we can all make a difference from a portion of our fat, then we can call ourselves civilized. We can all do our part in helping those who cannot help themselves.

  • Edwin - Tuesday, November 20, 2007, 11:22AM ET  Report Abuse

    • Overall: 5/5

    Dave is the man. Its the truth, give give give you time your money and your love. I hope to be someone like him and better one day.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 11:06AM ET  Report Abuse

    • Overall: 5/5

    Best article you've written in months. I'm typically not a fan of "fluffy" finance articles, but this one is the exception. Good job.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 10:35AM ET  Report Abuse

    • Overall: 5/5

    Network for Good. Thanks.

  • Edward - Tuesday, November 20, 2007, 10:27AM ET  Report Abuse

    • Overall: 5/5

    I agree, David. The more you give the more you get back. The more I give the more I get back. It is the way God intended it to be.

  • GP - Tuesday, November 20, 2007, 9:58AM ET  Report Abuse

    • Overall: 1/5

    I normally like David's articles, but this one touting his own great charity while neglecting the challenges of charitable giving is not one of those. First, studies have shown that wealthy people (top 1 or 10%) as a whole give far less in percentage of wealth than those in the top 50 to 10%. Second, if you subtract out the money given to events and buildings prominently displaying their names, wealthy people give even less. I don't see buying a building to put your name on it as charity any more than US Airlines made a charitable contribution to the Phoenix Suns. In general, the very rich are very bad at helping others especially since they rarely give anything beyond surplus money. Third, be careful with umbrella organizations like United Way. While they are a charitable organization, they add a second layer of expenses (their expenses plus the expenses of the underlying charities). In addition, they often contribute to charities with whom you disagree (United Way gives money to Planned Parenthood which might upset some right wing individuals). Fourth, consider avoiding high profile events like farm aid concerts. Those tend to be very ineffective and celebrity touting. Instead, give steadily to places that focus on people in need. Special events tend to be expensive, to enrich many individuals and to ignore much more needy people just outside the targeted audience. Last, get involved more than writing a check. That is where the magical life change happens.

  • Nick Name - Tuesday, November 20, 2007, 9:50AM ET  Report Abuse

    • Overall: 4/5

    "Over the years, I've seen firsthand that the "have mores" give more. I don't think this is a coincidence. " No kidding, people with money can afford to give more. Thats a Trunk-like "no sheet sherlock observation". Overall, it was way better than any Trunk article since it gives advice on giving the right way to charities that dont use most of the money to line their own pockets. 1%? I shoot for 10% of after tax income plus or minus any capital gains/losses on investments. That way if I have a good year I give more, a sucky year like the last 2 and I give less.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 9:01AM ET  Report Abuse

    • Overall: 4/5

    Good article. I hope it reminds people in this country how lucky we all are. And I hope it inspires more people to give. But if he's going to pick a charity to be near and dear to his heart, I'm thinking he could have done better. Habitat's financials are not on give.org, but I know that a few years back, I made a donation online and pretty much got it all back in the form of fundraising efforts. Weekly mailings asking for more money, paid telemarketers... I got so tired of it. I asked to have my name removed from their mail/call lists and won't donate to them again unless I see a financial statement that puts less than 10% to fundraising. But definitely look give.org or the other websites before giving. There are several that put good use to your money. And I think that 70-75% of money toward programs is a little low. I usually look for charities that put 80% of my donation to work. One stellar program is Toys for Tots. They are pretty much all volunteer, do low cost fundraising like emails, and end up putting 98 cents of every dollar to work. (But that's not typical.) Just find something that speaks to you and give!

  • marc - Tuesday, November 20, 2007, 8:58AM ET  Report Abuse

    • Overall: 5/5

    BEST ARTICLE I SEEN HERE YET!!!!!!

  • Yahoo! Finance User - Tuesday, November 20, 2007, 8:45AM ET  Report Abuse

    • Overall: 5/5

    Great article! I have been amazed how much God give us! There is no excuse not to give! Wish everyone a thankful and happy Thanksgiving!

  • Matt - Tuesday, November 20, 2007, 8:38AM ET  Report Abuse

    • Overall: 5/5

    You know the saying "The grass is always greener on the otherside" and "You don't know what you have, until its gone" Find out what they really mean by giving of your time, not just your money. You will earn more money in your life, but you will never get more time. Volunteer at a soup kitchen, an inner city school, or in a 3rd world country. When you see the smiles on their faces knowing what they live through daily, you won't be able to look at your own life the same way again. Being thankful for what you have, is more than trimming a little fat off your turkey this year. Give a whole turkey, and teach someone how to cook it. Then you will see how thankful they are, that you gave your time.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 8:33AM ET  Report Abuse

    • Overall: 4/5

    It's sad that there are so many people that have so much but they refuse to share their good fortunes with anyone. I'm not even talking about giving to charity. These are people who have good people working for them and the people who think they are generous in giving a 10% tip for their meal. I participated in Operation Santa Claus the past few years. Anyone can do it. Contact your post office to see if they have letters to Santa from disadvantaged children. Then you buy gifts and have them shipped to the child for Christmas. I think that's sometimes better than just writing out a check to a charity.

  • budget lover - Tuesday, November 20, 2007, 8:27AM ET  Report Abuse

    • Overall: 4/5

    Good article, but one note - many charities have outdated and inefficient administrative departments specifically because people restrict their gifts to program expenses. While a charity with 30% admin costs would be suspect, it's important to remember that an underpaid accountant or IT analyst in a chartiy is even more problematic than if he/she were in the corporate world. While it's obviously important that charities focust the majority of their time and effort on mission-related activities, under-funded administrative departments can have an even worse effect on overall mission accomplishment.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 6:08AM ET  Report Abuse

    • Overall: 5/5

    I agree 100%! I am a school teacher and feel extremely wealthy everyday because what I do makes a difference. Being wealthy does not mean you have a large sum of money. I also decided to help other teachers stay in the teaching profession and wrote a book titled "How To Survive (and perhaps thrive) On A Teacher's Salary." I hope every teacher reads this book to help them continue to make this world a better place despite earning a low salary. Keeping with the theme of giving, a portion of the proceeds from this book will be given to the Cystic Fibrosis Foundation. I have a niece and a family friend that have this disease and hope my book can help find a cure for it.

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