181. Five ways to decide how much to donate if you're not very religious

Welcome to Progressive Pockets! I go by GG, that’s short for Genet Gimja. This is a show about money and power. Our money and power to be specific. I for one, am tired of being fed the lie that only billionaires have enough money to have some power around here. We have power too.

There are lots of ways that our money has power. Where we shop, how we invest it, how we donate it- that’s what I want to talk about today. A question that I get a lot. Maybe more than you’d think. How to decide how much to donate.

So let’s talk about it! I’m going to provide a handful of ways you could make this highly personal decision.

1. Even if you aren’t religious, you could borrow from those traditions. 
The Bible instructs Christians to donate 10% as a tithe. 
The Torah guides Jews to give 10%. 
Among other donations, the Koran instructs Muslims to donate 2.5% of your wealth (not their income) after you have reached a certain threshold of income, which I think is a very interesting way to think about it as well. It’s interesting that you need to meet a minimum financial security before you are required to give, and also it is interesting that the 2.5% is of your wealth not your income. So in other words, 2.5% of the value of all of your possessions (your retirement savings, your property if you own one). This is so important to the religion that it is one of the 5 pillars of Islam. Actually this is just one aspect of the giving laws in Islam, I highly recommend reading more about this if you have time, different types of wealth are subject to different giving requirements.
Here’s an interesting tidbit related to the concept of religious tithing. In Germany, Declaring yourself as Christian and a member of a recognized church in Germany means you pay church tax, which is about 8-9% of your income tax. In other words, a portion of your income tax goes towards funding church activities and services and yes those churches can then choose to give away some of that money. So interesting.

2. One way to choose how much to donate is to look at how much you have left after you pay your bills every month. I don’t love this, but it is another option to figure out how  much to donate. In other words, to look at your disposable income and decide how much you can part with. Personally, I find that kind of an unreliable way to think about it because for most of us, we have debt for example, student loans and mortgages. Me, personally, if I had an extra $1k at the end of the month, I would probably drop that into a spreadsheet to see how much that would save me in terms of interest payments on debt. Even without debt, I’m just not sure it is within most of our natures to give from the leftovers at the end of the month. Kind of like planning your workout for after you “finish everything else.”

3. You could borrow from the example of carbon offsets. So you know with carbon offsets often you’ll take a flight and your ticket will tell you how much CO2 your flight is putting into the air. Then the airline will convert each ton of CO2 into a monetary value and donate that much towards conservation efforts. You could do the same thing for whatever your vice is. For example, however much you spend on cigarettes or fast food or episodes of 90 day fiancee every month.

4. Another way is to ask yourself to look into the future, picture yourself on dec 31 taking stock of the year you just had. How much would you like to be able to know you donated? Really try to think about a number that would feel like, dare I say it, your fair share. And then whatever that number comes out to be, divide it by 12 if you plan to make monthly donations (or if you have the money now, go ahead and send that donation and get it done so you don’t have to worry about forgetting).

5. So there’s a wide range there, the other option is just to do what most other people do. I looked for information about how much Americans donate on average, and the estimates range from 2-5%, with some folks, such as those who are religious or who are more advanced in their giving journey, tending to give 10%.

If you do make your goal a certain percentage, such as 5%, I really want to say: don't go down the rabbit hole in terms of whether you pick your percentage from your pre-tax versus your post-tax income. I’ve heard people debate this back and forth, and I think that is way in the weeds. Just start by giving that percentage of your pre-tax income and when you get good at that, switch to giving that same percentage but now of your post-tax income. And then when you get comfortable with that, increase the percentage.

So to recap, here’s what we covered today. Five different ways to decide how much to donate:

• Borrow from religious tradition. Consider giving 10% of your income or 2.5% of your wealth.
• Give what you have leftover after you cover all of your expenses. I don’t love this one. The tricky thing about money is that it is so seductive to feel that there’s never enough.
• You could borrow from the idea of offsets. What’s your big vice? You could give an amount to offset that.
• This one is my favorite one but it is about doing some thinking about how you’re going to feel on dec 31st. And really go through that mental exericse of asking yourself how will I feel if I will have given this much at the end of the year.
• And finally, when in doubt, look around and what others are doing around you. Americans are generous, and we tend to give around the ballpark of 2 to 5% of our incomes, so that could be a great starting point as you think about being more thoughtful about how much you donate.

You know, one more thing, if you are wealthy, I mean just financially set for life. Give more. These suggestions today are for regular people that still have to work lol. But I know there’s a range of wealth among the listeners of this show, so if you’re thinking about how much to give when your bag is a little bigger, I’d love to help with that too. Just let me know. You can always reach me at progressive pockets at gmail dot com.

Speaking of donating, would you all be interested in some specific names of places that I like to donate? I’ve been thinking about doing a series on this, just let me know.

Word of mouth is how podcasts grow, so please do me a favor and share this episode with someone you think might enjoy it.

Let’s end with a quote… this one comes from the incredible Bryan Stevenson. Please google this guy if you’ve never heard about him. Anyway here’s the quote:

“We are all implicated when we allow other people to be mistreated. An absence of compassion can corrupt the decency of a community, a state, a nation.”

Let’s talk again soon!