63. 2023 Predictions

Hi, welcome back to Spend Donate Invest! This is a podcast that’s exploring the topic of whether there might be some ways we can line up what we’re doing with our money and our values when it comes to the kind of world we’d like to help shape. We vote, we protest, we write letters to our senators. But what about our money? As individuals? What can we do to line up our money and our values. I started researching this topic in the summer of 2020 when I had this sudden realization as I was looking at my investments that I might have a choice when it comes to the companies that I’m pouring my money into. I had thought about shopping my values now and then, I had vaguely heard about community focused banks, but it didn’t bubble to the surface of my consciousness in a concrete way until that summer. So I asked around to find out if this was a topic my community was interested in. I did a trial run. And launched about a year ago. Fifty something episodes later, here we are!

Today I want to talk about predictions for 2023, but it’s only right that we revisit last year’s predictions and whether they came true or not…

So, these were my five 2022 Predictions
Wealth guilt will grow among the 1%
It will become easier to donate crypto and easier for financially insecure families to receive donations of crypto
Donations from the megarich will be scrutinized a little more
Direct financial assistance will grow in popularity as a practical way to provide faster, more efficient help to those who need it
Employees are going to push their employers to offer socially responsible 401k plans

So, let’s see how each of those went:

Wealth guilt. Did it grow? I’m not sure! I don’t know exactly how to measure that one. I did hear about some fear from the super wealthy about class warfare, if I can find it, I will link a piece about a guy who was hired as a consultant to help super rich guys design their bunkers and survival strategy in case rich people came under attack. Wild, right?
Is it easier to donate crypto? I think so. I did see more nonprofits offer a crypto button next to paypal and the credit cards. But the other half of that, is it easier for financially insecure families to receive donations of crypto? I’m not so sure about that. My sense is that crypto still is pretty niche and with the way crypto went this year I just don’t see it becoming more accessible or appealing to the masses anytime soon.
Donations from the megarich were scrutinized a little more this year! I do think that is true. MacKenzie Scott caved this year to repeated questions about her donations- where and how much she’s donating. One big piece of news this year was the founder of Patagonia’s announcement that he was giving the company away. And that was scruitinzed as well. Lots of valid questions like are you really giving it away? To who? What will your role be? And all was not what it seemed, let me know if you’d like an episode with a deep dive on that.
Direct financial assistance…did it grow in popularity? I think it is too soon to see the analysis of the data this year for that. But I will be keeping an eye on that.
Employees are going to push their employers  to offer socially responsible 401k plans. I have no idea if that one happened either.

So, net, out of the 5 predictions, I’d say one came true: donations from the megarich were scrutinized.  One I would feel comfortable in guessing that it did not come true, the one about crypto making philanthropy more accessible on the giving and the receiving end. And then for a couple of them, I think the survey is still out. I don’t know yet if direct financial assistance and socially responsible 401ks are on the rise. I hope so, but I don’t know yet. I hope more data about those come out as we begin the new year.

It also feels like a good time to take stock of my own financial goals at this time as well. As you know, this show isn’t about how to make more money it’s about how to align our values and our money and this year I did have a goal of shopping more locally and giving away more money. Shopping more locally went pretty well, I reduced my reliance on online shopping and started to force myself to spend more time exploring the shops around me and trying their products until I found some things that I’ve added to my rotation. It has also meant that I am eating more seasonally because I am shopping more from local farmers rather than imported produce, to some degree. It worked this year, I’m not committing to it forever, the philosophy on this show is more laid back. Not here to make dramatic and restrictive goals, just easing into decisions that make sense for now.

The second goal I had this year was to give away more money and that did not go well! My strategy was to decide on an amount of money that I wanted to give away and to divide that into a monthly amount. Every month I had some fixed donations for my long term giving and then I left a portion to go to flexible donations, for example if I was invited to participate in a fundraiser of some sort. I really like this hybrid model for me because it allows me to build towards a long term goal and support places that I am feeling invested in for the long haul, but then it allowed me some flexibility for things that pop up. But what happened this year was that my flexible giving was inconsistent. Some months I just did not end up allocating that cash anywhere. And that surprised me when I realized that as I was reviewing my year. In the past, I have treated the money as a use it or lose it ticking time bound thing, so if I had set aside a certain dollar amount in monthly flexible giving and I hadn’t given it away by the end of the month, it just didn’t get given away. So I guess technically that isn’t use it or lose it, it is more like…. Give it or keep it lol. And that worked well in the past, but this year I had several very large expenses planned, and so I definitely tightened the belt and got very conscious about my spending this year and even though I had budgeted to give away that amount of money, I do think that my subconscious general vibe of being very cost conscious this year may have impacted my eagerness to make sure the money was actually being given away. So that was very interesting to observe, that even when I have set aside a certain amount of money to give away that fits within my budget, if I am generally feeling penny pinching or cost conscious, if I am feeling restriction in my spirit, it is going to be less likely that I make that allocation every month. So that is something I am going to take into consideration as I think about setting up my giving going forward. Right now my system works OK if I’m not feeling that restriction in my spirit, but for times when I am more cost conscious than usual, this system is not the right one. SO I haven’t decided what I will do yet, but I like to share my own thought processes in case it helps anyone else brainstorm. I was thinking a better system in this type of situation would be to go ahead and just make 100% of my giving fixed, in other words I wouldn’t split my donations and make 50% fixed and the other 50% flexible, I would just make it all fixed. That’s one idea that came to mind. Another thing I’ve been pondering is how to take advantage of a technique I read about, I’m sure it has a name, but I don’t know it.

It came from people who were trying to understand how to increase the proportion of employees that sign up for health insurance. What they found is that many employees would let the deadline come and go and they wouldn’t sign up for a healthcare insurance plan/. So instead of making it an opt-in program, they made it an opt-out program. Employees would automatically be signed up for a particular health insurance plan and then it was up to the employee to go into the system and change it to whatever plan they want, if they have a preference. And I want to say the same thing was done for 401K participation as well. THere’s a default option that is selected and then you have to go into the system and change your selection if you want to do something other than the default.

I’ve been pondering how I can do something like that with my giving. I would love to find a way to have a portion of my giving remain flexible but also have a mechanism that ensures that the money actually goes out the door that was protected for this purpose!

In terms of predictions for 2023, here they are:
Americans gave a lot of money in response to the coronavirus pandemic and a reckoning with social and racial inequality in our country. More recently here, the economy has taken a downturn and inflation has, well, it has inflationed. So, my prediction for 2023 is that I think Americans will donate less this year, including among Americans who aren’t even materially affected by the economic downturn. I don’t have data behind this, I just have a hypothesis that even wealthy people, who live off the interest of their wealth, my hypothesis is that they tighten their purse strings too. Actually, having spent a lot of time around people who live check to check, sometimes relying on benefits like food assistance and also having spent time with the very wealthy, honestly it does seem like the wealthier folks are often less likely to share their money. Yes, we read about millionaires and billionaires giving away money all the time, but as a proportion of their wealth, I have observed that people with very little money to spare are more likely to give away a greater proportion of their money. And my prediction is that donations, especially among the wealthy, will decrease in 2023.
Doesn’t it seem like bitcoin has to come up in predictions? LoL. My bitcoin prediction would be that fewer nonprofit organizations start adding bitcoin as a way to donate. Maybe some charities will even roll back being able to accept bitcoin donations. And the reasoning behind my prediction is that we have seen the volatility of bitcoin, back in a past episode we talked about the wildest example of that. Vitalik Buterin, the creator of Ethereum, donated crypto currency worth $1 billion to a covid nonprofit in India and then it immediately plummeted in value. I’ll leave a TechCrunch article link so you can read more about that if you want.

So if you have a system or a habit that you want to share, please do get in touch, I would love to hear about it.

Link from today's episode:
https://techcrunch.com/2021/05/12/vitalik-buterin-donates-1-billion-worth-of-meme-coins-to-india-covid-relief-fund/