Increasing your family’s generosity is easier when you have a giving plan based on sound principles. I frequently meet families who have a plan for saving, investing, or spending, but an intentional giving plan is rare. Why is this the case? As we talk to new clients, they often express a goal to give more to their favorite causes. Giving is on their minds, but not integrated into their financial plan. Thankfully, a few simple principles can help any family meet their giving goals and move from an attitude of scarcity to a life of generosity. We call these principles the P’s of Giving, which we adopted from Andy Stanley’s book Fields of Gold.
Priority: For most families, giving is something you do with the leftovers. Generous people make giving a priority. They are willing to give first, save second, and spend the rest. Are you giving before or after you spend?
Percentage: Consider measuring your giving by a percentage of income rather than total dollars. I often meet families who are giving the same amount now as they did 20 years ago. Their income has grown, but they increased their standard of living rather than their standard of giving. Not sure how much to give? Consider our 10+1 rule. Strive to donate 10% of your income and 1% of your assets each year. What percentage of your income would you like to give?
Progressive: We cannot always meet our giving goals today. However, by progressively increasing our percentage of giving, we can get closer over time. A consistent increase in your giving allows you to financially “sneak up” on yourself. Before you know it, you are giving more than you ever thought possible. I once heard a testimony from a couple who started giving 10% of their income when they married. They grew that percentage over time and now give over 90% of their income while living on less than 10%. How much more will you give next year?
Prompted: Never let your plan get in the way of the emotional and inspirational components of generosity. Leave room in your giving plan for unexpected giving opportunities that touch your heart. These inspired gifts can take many forms. Some families enjoy giving to friends or strangers in need rather than qualified charities. Maybe your favorite charity sends out a matching gift opportunity. Whatever the reason and whatever the amount, leave space to give as you are inspired. What causes have you recently felt prompted to support?
As we enter into a new year, I encourage you to evaluate your current situation, goals, and giving plan for 2021, using the P’s of Giving as your guide. Have a wonderful holiday season and a happy new year.