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21. April 2017

How Sweet is Charity?

by Deborah Dellinger, Director, Not-for-Profit Operations, My Next Season

A psychology professor in British Columbia wondered if having money aided or impeded perceived happiness. Her research uncovered that adapting to a larger income carried an invisible price tag: for many people, it diminished their ability to be delighted by the small things of everyday life such as savoring a piece of chocolate. Based on her experiments which simulate chance encounters with nature, a pattern formed suggesting money can get in the way of happiness.

She then further explored ways to maximize perceived happiness of wealthy persons. Her conclusion: the strongest way to maximize perceived happiness was the giving away of money to causes that are important to the giver. Studies by other researchers reinforced her early findings: people who gave money away reported feeling significantly happier than those who did not (Elizabeth Dunn, Happiness and Money, PopTech 2010).

We are taught from a young age that “it is better to give than to receive,” and this maxim remains true: there are many benefits to giving. At the University of Oregon, researchers found pleasure centers of the brain are activated when subjects chose to give money away. This is the same reward pathway, the mesolimbic system of the brain, that releases “feel-good” chemicals when we volunteer.

In one study, subjects were given $100 and placed in an MRI machine while being asked to approve various monetary transfers to food banks. The transfers flashed on a screen inside the MRI and were tied to the $100. In all cases, the pleasure centers in the brain showed increased activity regardless of whether the subject voluntarily gave money or was required to transfer it. The brain activity was most intense, as measured by the MRI, when they voluntarily gave the money to the food bank (NIH Research Matters, “Brain Imaging Reveals Joys of Giving,” June 22, 2007).

And there are many more reasons to donate:

  • • The act of donating brings you into contact with new people, creating new relationships and possibilities.
  • • Donors gain new insights and are able to see a proliferation of benefits stemming from their personal actions and generosity.
  • • Witnessing the impact of one’s donation inspires others to give.
  • • Budgeting for charitable giving improves personal money management and ensures your money follows you heart.
  • • Donating money while alive provides a great example for children and friends.
  • • Targeted donations can enhance your sense of fulfillment and purpose.

Giving your money away may make economic sense as well. According to Charity Navigator, a gift to a qualified charitable organization may be tax deductible (always check with your tax expert). The higher the tax bracket, the more incentive and reward—topping out, in the simplest form, at 35%. Thus, a $100 donation actually costs the donor $65.

Finally, charitable giving brings out the best in us and builds stronger communities. As a culture, we often give in honor of specific milestones, or endeavors, or as memorials. We support medical research, our nation’s veterans, disease eradication, and political campaigns. As communities, we give money to build hospitals, youth clubs, and support families going through difficult times. Whether you have loose change in a jar, or a portfolio of available funds, every donation counts.

As Nelson Mandela said, “What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead.” So, when you donate, you multiply your own happiness.

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