Solve bigger problems in society Organizations that receive donations have more resources to solve problems on a larger scale than people. Many charities help people in need, while others use the donations they receive to improve their community and make it better for all. One of the main positive effects of donating money to charities is simply feeling good about donating. Being able to give back to those in need helps you achieve a greater sense of satisfaction and personal growth, it feels good to help others.
Instead of spending money on a gift that someone can look at once and not use again, you can donate that money to a charity in need on behalf of your loved one or send a symbolic gift (see the Save the Children gift catalog for ideas). This leads to a sense of self-esteem, knowing that you are offering much-needed resources to a great cause for those in need. As an added benefit, both you and your loved one will feel good about giving back to others. Why do people donate? Studies overwhelmingly suggest that people aren't entirely altruistic when they give.
People seem to benefit more from the act of giving themselves than from the benefits that their gifts generate for others. However, the nature of these benefits is not very clear. Donors can be concerned about the total amount of goods or services that charities produce, or donors can enjoy the simple act of donating. People may also be concerned about the public recognition they receive when donating.
The fact that charitable donations can be deducted from taxable income means that the richest people, who face the highest marginal tax rate, have the greatest incentive to donate because they face the lowest marginal cost of donating. All of this is important for designing public policies and for evaluating the efficiency of charities in providing the services they offer, such as alleviating poverty or funding cancer research. Many employers match employees' charitable donations or make monetary donations in honor of their employees' volunteer hours. The preference for prestige means that charities can increase contributions by reporting on gift categories and publishing donations.
However, this theory has several implications that are not validated by empirical evidence on private charities. To put the size of the donations into perspective, Americans donated to charities last year an amount roughly equal to the national income of Norway or Indonesia. With the simple act of making a charitable donation, not only are you helping the world at large, but you are receiving the added benefit of more relaxed parties. While several demographic characteristics have been found to be useful in predicting charitable giving, income is by far the most important predictor of giving behavior, according to economists Robert McClelland and Arthur Brooks.
So, the next time you think about treating yourself, remember the positive health benefits that a donation to charities can bring, as well as the positive change you can help achieve around the world. Charitable donations also increase with age and education; they also vary with respect to sex (women donate more), but not with race. Donating to a charity can make you feel good and also help improve your physical health and mental well-being. You can get a tax deduction and reduce your tax burden when you contribute to a qualified charitable organization, such as UMFS.
If people were perfectly altruistic and only concerned about the total value of their monetary contributions plus the salaries imputed for their time, they would prefer to work somewhere else to get paid and contribute money to the charity...