How to Give Money (and Get Happiness) More Easily


If you have more money than you need, you should start giving some of it away.  That’s the lesson I learned about a year ago, when I took a gamble and donated $100,000 to a variety of charities, centered around the Effective Altruism movement.

More on Effective Altruism: The Life You Can Save website, and my earlier article on the subject.

At the time, I had no experience with giving to anyone other than immediate family and friends, so I didn’t know how I would feel about it. But over the course of this past year, I have had many late nights to reflect on life and what it means to live one that feels worthwhile. There have been successes and failures, mostly happy times but also plenty of sadness shared with my siblings as our Dad made his departure.

During all this questioning of life, I kept thinking back to the times I’ve been less selfish and less fearful, and more willing to help other people. These were the things that reassured me that my life was indeed a good one, and that I wasn’t squandering the opportunity too badly so far. In short, being a good person was by far the most reliable source of happiness.

So. If hard work and generosity are what bring meaning to life, it makes sense to keep at it, even when it seems difficult. With this in mind, I vowed to make another round of donations of equal or greater size this year.

The Tricky Side of Philanthropy

While most people would assume that giving away money is easier than making it, when surveying wealthy people I have found the opposite is often true. After all, once you build a prosperous business or career, the income becomes almost automatic. You indulge in your natural and joyful tendency to work hard every day, and the money keeps flowing in, often faster with each passing year. There are no decisions to be made, and you know every dollar of net income is going somewhere worthwhile: to you.

But to give money away, you have to overcome a whole new set of challenges:

  • Overcome your fear of having less money.
    After all, more is always better – you can always benefit from more security, right? (this is actually wrong, but it can be hard to recognize)
  • Figure out who is most deserving of your money.
    It took so much time to earn the money and overcome the fear of giving – the last thing you want is to see it go to waste.
  • Figure out how to get that money to the worthwhile recipient.
    You have to find their webpage, mail a check so the credit card company doesn’t steal 3% of your donation, and ask politely that they don’t put you on their mailing list and hound you for the rest of your life.
  • Sort out the tax consequences. In most cases, you can deduct charitable donations on the “itemized” part of your tax return, but until you hit the itemizing threshold of around $10,000 you might not get any benefit. On the other hand, certain charitable expenses are deductible directly from your business income, if you run a business.
  • “Too confusing already. Forget it, I’ll just keep my money.”
    And thus, you end up in the same trap that keeps many people from being generous.

Since I had already pushed through the pain last year, I knew I could handle it and repeat the same thing this year. Just write the same checks and mail them to the same places. Job done.

But then I noticed a few shortcuts that make things even easier:

  1. Betterment Investing just added a spectacular no-cost automatic donation feature. Using their existing tax-optimized system, they allow you to donate your most appreciated shares directly to any of their many connected charities. This gives you the maximum tax deduction right now, while reducing your taxes further when you later withdraw from your account later in life.
  2. Paypal has a similar feature: even from within the minimalist phone app, you can click a “donate” icon and transfer out surplus bits of your balance directly to a large selection of good charities. Paypal does its part by not taking any fee for these donations, no matter how large. You can use up existing paypal balances, or have them draw through your connected checking account  – I found this was a very smooth and easy way to try your hand at giving.

MMM Headquarters Becomes an Automatic Philanthropy Machine

MMM Headquarters shows off its holiday style, just last night.

I noticed that PayPal feature because I happen to have a constant, growing surplus in my account these days, as a result of starting the MMM-HQ Coworking space right here in downtown Longmont.

The money side of this situation is pretty interesting:

  • We bought the property (which now hosts two businesses) for $225,000, which means my half cost me only $112,500.
  • Then I spent about $30,000 in materials and subcontractors to whip it into shape. (Plus about 700 hours of my own labor, which I happily donated)
  • We now have about 60 paying members at $50 per month each, for a total of $3000 per month or $36,000 per year.
  • But the coworking space is still kind of quiet during the days, so we can sign up a few more people and bring this annual number to $50,000.
  • Property taxes ($4k), Utilities and Beer ($1600), and ongoing upgrades ($10,000) only consume 30% of this budget, leaving a huge surplus, as long as I keep running it myself and don’t draw any salary.
  • Many people and companies have started donating supplies to us, in an unprompted show of generosity. Authors send us books, Nimbus Roasters keeps our coffee stocked, Bunch Bikes sent a fancy electric cargo bike, Aerobis sent some cool strength training equipment all the way from Germany, Flatiron Spice Company brought in red and green chili spices, Lefthand gave us a discount on beer kegs, members are donating useful equipment like 3-D printers and weight training equipment from their homes, and the list goes on.So I figured, in the spirit of all this sharing, why don’t we make this building a philanthropy machine? Its ongoing profits can be donated to charities – both local and international – on a regular basis. Along with doing a lot of good, this will probably give all of us members a stronger sense of belonging.

What if I’m Not Ready to Give?

I’m writing this post to encourage people who have plenty, to consider giving it to help people (and parts of our natural environment) truly in need. If I can prompt you, wealthy person, to decide that giving to the world’s most effective charities, is even better than getting a slightly better car or leaving your children an extra-large estate, then this post might be the most effective one on this whole website.

But I do not want to make anyone feel guilty for not giving away money, when they don’t yet have a surplus. If you’re working hard and saving effectively for financial independence, abundance will come. If you’re not there yet, don’t stress out about it. There is no “tithing” in the imaginary religion of Mustachianism.

Details on Easy Giving

Some of the staff of Givewell in San Francisco office perform the “Mustachian Salute”

As part of writing this article, I made part of my $100,000 donation via Betterment’s new system. I have three accounts with the company (my public Betterment Experiment, a rolled-over IRA, plus a personal taxable account with the largest balance of the three). All three accounts have seen rapid appreciation due to the current boiling-hot stock market,  so there are lots of capital gains available to harvest.

Donating appreciated shares expands the power of your giving compared to just giving cash, which is quite a neat trick. This quick table from Betterment’s new Charitable Giving Explainer page lays it out very simply:

In this example, your donation nets about 19% more tax savings than a direct cash donation.

So I tried the same thing in real life. The largest of my donations this year ($70,000) was to GiveWell, through the Betterment system.  As I fired it up, Betterment automatically estimated my tax savings in real time:

This $70,000 donation will cut my 2017 tax bill by $22,841.. AND reduce my eventual capital gains taxes by $4188. This is the true power of donating appreciated shares.

As with last year’s donation, this biggest chunk went to charities based on the Effective Altruism philosophy. What this means in practice is, “Create the best results for humans possible, on a worldwide basis, with each dollar.”

I believe this is both the most humane and the most logical way to donate money, because of the following course of events which has been proven again and again:

Improve developing world health and education
-> these people have better lives immediately
-> but also the more empowered people also choose to have smaller families
-> world population growth slows and eventually reverses -> everybody wins.

So in this round of donations, here is where the money went. You can click each charity name to get to their own website for easier research.

Charity Amount Funding Source
Givewell $70,000.00 Betterment
World Wildlife Fund $10,000.00 Betterment
Doctors without Borders $10,000.00 PayPal (MMM-HQ)
Amazon Conservation Association $5,000.00 Website/C.Card
Natural Resource Defense Council $5,000.00 Website/C.Card
Bicycle Colorado $5,000.00 Website/C.Card
Total $105,000.00


Note on giving through GiveWell: I followed up with a note to donations@givewell.org directing that they use the contribution for “Grants to recommended charities at GiveWell’s discretion”.  This is a necessary step as it’s not yet shown in the Betterment interface.

Note on Donating Appreciated Shares: you don’t need a Betterment account to do this, it just makes it easier. Several other financial institutions make this possible, and Vanguard has a nifty “Donor Advised Fund” feature.

And don’t forget the possibility Donor Advised Fund: you can set aside a larger amount right now (while the tax rules remain favorable to charitable deductions) and give it away over time. See more details at Vanguard and the Physician on Fire’s article about this great strategy.

Got Questions?

Since this is an unusually important topic, I will try to invest extra time into answering questions in the comments section. And if you’re an expert on any of these subjects – philanthropy, investing, tax policy, the developing world, medicine, or the environment, please feel free to do the same.

Thanks, world, for another prosperous year and here’s to the next one!

  • Hcat December 5, 2017, 1:00 pm

    I’m sort of a believer in the tithe. Given today’s economic pressures, I might define it as 15 to 20% after taxes, student loan repayments, and rent or mortgage payments have been deducted. But giving should not be postponed until one has had a degree of “success” or a midlife crisis. Life should not have two halves, the “making it” half and the “giving back” half; both halves should be happening simultaneously.

  • Mary December 5, 2017, 1:29 pm

    Great article and message. You may want to point out that deductions for contributions of capital gain property are limited to 30% of your adjusted gross income, whereas contributions of cash are subject to a 50% limitation. Per IRS publication 526:
    A special 30% limit applies to contributions of capital gain property to 50% limit organizations. (For contributions of capital gain property to other organizations, see 20% Limit , later.) However, the special 30% limit doesn’t apply when you choose to reduce the fair market value of the property by the amount that would have been long-term capital gain if you had sold the property. Instead, only the 50% limit applies.

    In addition, when determining which charities to give to, it is important to make sure they are 501(c)(3) public charities if you want to maximize your tax deductions. If you give to certain charities such as private operating foundations, you are again subject to the 30% limitation.

  • The Marmot December 5, 2017, 1:34 pm

    Kudos on your personal donations! After reading your post, I stepped up and increased our family’s own charitable contributions substantially.

    Another option for folks in this community is to get personally involved with charities to assist them with their finances. For your typical small non-profit, the investment decisions are being made by people with much less financial knowledge than readers of this blog have. They often then rely on investment professionals for advice, and get stuck paying 1.5% to 2.0% of assets annually in fees, and make all of the typical mistakes chasing fads, etc.

    I saw this first hand. I was donating to a local land conservation trust, and then learned that they were paying over $75,000 in investment management fees annually! I was so upset that my donations were only covering a fraction of a bank’s fees that I got involved with the board and convinced them to switch to a low cost, passive investment approach. And these guys weren’t unique at all – most smaller charities are in the same boat, and could use the assistance of MMM readers to become more efficient financially, and more effective at what they do.

    MMM – again, Kudos!

  • EL December 5, 2017, 1:47 pm

    Very cool stuff! The donations are inspiring. But….do you feel strange trying to optimize your taxes when you already have excess money? I realize that no one is obligated to pay more tax than needed, but it doesn’t seem to fit your philosophy about contributing to society.

    • Mr. Money Mustache December 6, 2017, 11:10 am

      Yes, I do have those thoughts about tax optimization. A friend of mine refers to taxes as, “Paying for Civilization to exist.”

      Even with the Donald at the wheel drunk-driving (or any other president), the bulk of our tax money still goes to useful stuff, when you actually look at the budget: https://en.wikipedia.org/wiki/United_States_federal_budget#/media/File:CBO_Infographic_2016.png

      Then, don’t forget about state and local taxes which may be even more well used. (Except when they go to pay for ever-more car-clown roads and bridges :-))

      However, I feel that giving directly to super-efficient charities is even more efficient, at least with a portion of my money.

      • EL December 6, 2017, 11:35 am

        “I like to pay taxes. With them, I buy civilization.”—Oliver Wendell Holmes Jr.

  • Jeff December 5, 2017, 2:19 pm

    If anyone in Frederick, MD has any interest in creating a “MMM Headquarters” type of place, please reply below. Probably we will start with beers and bikes and books, with the idea of philanthropy as a goal down the road.

    • Hulu December 9, 2017, 9:15 pm

      Ditto near Marlborough, Massachusetts

    • Mr. Fired & Free December 14, 2017, 12:52 pm

      Hey Jeff – it sounds like we have common interests and are in similar areas. Hit me up sometime.

  • PJ December 5, 2017, 3:01 pm

    Hey MMM – thanks for the excellent post about giving. It’s such a timely topic at this point of the year.

    I’m hoping that you and the rest of the MMM community might be able to help me think through our situation: My wife and I are both in our mid-thirties and for the last few years we’ve been challenging ourselves to give between 10-20% of our income away. We are both employed by nonprofits, so we don’t make a ton, but I’d say we’re well-off and live a wonderfully rich life (MMM style). We were also raised in families that gave back generously to their communities, so that is where our philanthropic mindset comes from. It’s been fun trying to save substainlly for retirement and also to think about giving generously as well.

    So far, we’ve been giving cash gifts, but we’d like to move into giving more appreciated securities. What’s the best way to get started in that space? We have our IRAs through Vanguard and 401k’s through work, but we’ve yet to open a taxable account. I would imagine we’d use that exclusively for our gifts, once we get a decent amount in there and see some appreciation of the assets.

    For instance, we have pledged to give $22k away next year. Half of that gift we already have in a high-yeild savings with Amex. I’m curious to know if I should be investing that into a taxable account to get things started. I’ve been hesitant because I don’t want the markets to dip and loose the majority of my pledged funds.

    Thanks for your guidance and happy holidays everyone!

  • Chris Urbaniak December 5, 2017, 3:18 pm

    Hi Pete – Love what you’re doing with the HQ, and how you’re channeling it into a philanthropic machine!

    Being deliberate about your giving, with a specific purpose for the funds is a great idea. I believe that it provides far more “bang for the buck” than simply responding or reacting to the trend of the day.

    In my case, setting things on automatic pilot is one way that we can maximize our contributions. By selecting one or two organizations and then setting up regular (non-credit card) donations, it helps the organizations with their budgeting process as well! Have you considered regular monthly/weekly contributions instead of regular annual contributions? Do you have any thoughts on the advantages or disadvantages to either approach?

    • Mr. Money Mustache December 6, 2017, 11:01 am

      YES – automatic periodic contributions are a better idea. Easier for you, and for the organizations. I hope to do this with part of the HQ income.

      • Paul December 6, 2017, 6:39 pm

        As the recently retired ED of a non-profit, I highly encourage regular small donations. Having regular, predictable income is super helpful and gives organizations of any kind greater ability to start new programs without worrying about the sustainability of operating funds.

  • Laurie December 5, 2017, 4:37 pm

    I was just listening to Scott Harrison talk about Charity Water, and was once again inspired to give more than we do. It is hard–I struggle with the ridiculous feeling of not having enough, when we have so much more than we need. Giving isn’t just a good idea, it’s an exercise for me that counteracts my greedy tendencies and reminds me to hold onto everything lightly. Thanks for a great and timely post!

  • Getting There! December 5, 2017, 4:52 pm

    Love this article and it’s so interesting reading all the differing viewpoints of giving and possibilities for doing so. I’ve had a donor advised fund through a community foundation, which are likely in most cities, for the past nine years. It’s one of the best things I have ever done. I just finished setting up a second fund this past month which where the annual disbursement will be directed to scholarships in memory of a dear friend. Each year I contribute to the fund as my situation warrants and once a year I get a report of the value of the fund and the amount available for gifting which is about 4% of the fund. I can then advise on how I would like the funds directed. Come the day I’m not able to provide the advice, the agreement I have in place will continue to support the organizations I’ve identified. For Canadians , a tool for estimating the tax benefit of making a donation is available at Charitable Donation Tax Credit Calculator http://www.cra-arc.gc.ca/chrts-gvng/dnrs/svngs/clmng1b2-eng.html I look forward to reading further reader comments.

  • Ecogeer December 5, 2017, 5:17 pm

    Great work MMM….

    this is a timely post as I just finished reading The Clean Money Revolution (https://www.amazon.ca/Clean-Money-Revolution-Reinventing-Capitalism/dp/0865718393 or the Library!) which is about putting your CAPITAL to work in addition to your surplus PROFIT, and thought this would be a great area for you to explore.

    With all the big transformations our society is going to need to undertake, there are some exciting opportunities to put the 94% of the ‘stache to work in addition to the surplus 4%. This is an area that all your readership can participate in, including those still growing their ‘staches. The Clean Money is likely to be the smart money as much of our current capital is tied to dinosaur industtries where much of their assets may not even be deployed (hey you, Big Oil).

    A bit more stewardship of our capital could radically transform this world which would be a very sweet wave to surf….. looking forward to more posts and discussions on this aspect of investing.

    Long time reader, but first time commenter… love your stuff.

  • Juan December 5, 2017, 6:05 pm

    Congrats on the new donations and all the cool stuff going on at the MMM Headquarters!

    Making the world a better place is a big motivator for pursuing FIRE. Not to say that one can’t make the world a better place before FIRE but I believe the impact can be much greater with more resources and more time.

  • Carl December 5, 2017, 6:29 pm

    “More Than Good Intentions” by Karlan and Appel makes the case that deworming programs are the most cost-effective method of boosting school attendance in developing countries. Here is a quote from the book (p 208):

    “Dollar for dollar, it’s no contest. The other attendance programs did work, but compared with deworming they cost an arm and a leg… An additional year of attendance from deworming costs $3.50. Yes, you read that right.”

    It’s worth pointing out that GiveWell recommends a number of deworming programs.

  • Derek December 5, 2017, 6:34 pm

    My wife and I have been talking about our end of year giving so the article was well timed! She decide to donate her $1,000 to a local charity supporting homeless teens and young moms which we have donated to in the past. I want my donation to have a lasting impact instead of a just a one time gift. I did some research on the Bill and Melinda Gates Foundation and it’s a great organization but my $1,000 donation will be a rounding error on their balance sheet. I like the idea of an endowment because instead of a one time donation, the principal of the endowment is preserved and the earnings are donated.

    I came to the realization that I can create our personal endowment by contributing the $1,000 this year and donating the earnings (dividends) at this time next year. Then next year if my wife and I both contribute our $1,000 each, our endowment will start to grow. Invested in a dividend appreciation EFT (VIG or similar) so the principal will grow as well. This will allow us to continue to donate when we are retired

    We’ll never be the Gates Foundation but we will be making a difference by having a lasting impact which is something we are both passionate about!

  • Solar December 5, 2017, 6:41 pm

    Strangely, I find myself more reluctant to give in the current political climate. I feel more worried that I won’t have enough to handle the future given that our country’s safety nets are being ripped to threads by those in power. I usually give as I see good charities come around. Now, I just want to clutch to my money in case something terrible happens and I need it. I have plenty of money (6-fig salary, no debt, decent savings, maxing out my 401k, don’t spend ridiculous amounts of money per month) – so it’s not like I’m on the brink of needing those social safety nets. But I wonder, what if something bad happens and those nets are gone? Definitely makes me more cautious than I perhaps need to be.

    I don’t really know when the caution should be toned down, or what balance I should seek. Though I am nowhere near financially independent yet, so maybe that’s a question deferred to the future.

    Also, I hear you on the relentless damn phone calls. I’ve decided to focus my givings on a single charity in the future. There are many valid causes out there – but by focusing on one, at least I don’t have to deal with all the fucking spam.

    • Mr. Money Mustache December 6, 2017, 10:52 am

      Give up your fear – you are doing great and can easily deal with any improbable ill that could befall you.

      Then, counterintuitively enough, this confidence and fearlessness will further reinforce your strength and ability to handle trouble.

  • JimD December 5, 2017, 8:13 pm

    This past Thanksgiving Eve I began a tradition with my young kids of Giving Night where we all chose one charity, brought our money to the table (the kids giving jars), each person spoke about their charity and then the house matched the donation. Later we voted on one to send a much larger donation to, the kids unaware of the larger amount We had some great dessert and conversation. I tried however to find a game to make the process more fun and apparently there is no real giving game, giving board game, or anything like that online. I think this could be a great idea for someone to create. Yes, we had a great evening doing it the way we did but I think with a little dice rolling, spinning of the wheel etc the kids would have become even more involved.
    I hope the tradition holds and I tried to pick a night where there will be the most kids present when they are older. My ultimate vision would be some live music/party atomosphere with friends and neighbors where you know if you stop by that house the night before Thanksgiving you will be dropping some dough but having a great time in the process.
    If anyone knows of anything like the game I mentioned or a giving night theme for adults please post.

  • Nick Walton December 5, 2017, 8:56 pm

    Arthur Brooks has done some really awesome research on how people who give (even when controlled for every other factor) end up making more money then those that give less. It took him years to figure out why this is, that people who give are happier and end up more successful because of it. Really cool research! https://commonsenseeconomics.com/wp-content/uploads/CSE_E_Reading-Brooks-Why_Giving_Matters.pdf

  • Lauren December 5, 2017, 9:20 pm

    Have you done any research on impact investing vs. charitable giving? While I understand lightening your tax burden, in 2016, only 390 billion dollars was given to nonprofit organizations with a 501(c)3 designation, as reported by Giving USA. The amount that we invest in the stock market is in the trillions, which, if investing in companies that go against values of sustainability, community building, decreasing dependence on foreign oil, etc. (as many companies on the Index are), will nullify any giving done on a larger scale. It seems that there should be more of an effort to align investments with the impact they’ll make, instead of charitable giving as a tax break. While I’m not personally FI, I’m working toward it, and this concept consistently makes me wonder, as not all my investments are in impact funds, but I know a personal value of mine is to stop killing the world (with waste, oil consumption). Do you have any thoughts or suggestions about this dilemma, MMM? If you weren’t FI yet, would you diversify and invest in impact funds, vs. funds that are profitable but whose policies are detrimental to the planet?

    • Mr. Money Mustache December 6, 2017, 10:49 am

      I agree Lauren. Owning an index fund that holds all stocks (and I do still have plenty invested in such funds) can tend to lift all companies both good and bad.

      You can target investments more thoroughly if you either buy funds that follow the “Socially Responsible Index” (both Vanguard and Betterment offer these options), or invest directly in other things.

      One upcoming investment/experiment for me in 2017 will probably be through Wunder Capital, located right nearby in Boulder. They offer dividend-paying funds on new solar electric installations https://www.wundercapital.com/

  • Pareto8020 December 5, 2017, 9:47 pm

    Super glad to hear that you’ve decided to give 70% of your donations to Givewell. I’ve also been donating to Givewell recommended charities for the last few years. It took me a while to work out which charities I’d like to donate to, and after much research I figured Givewell was a perfect fit – I agree with their all-lives-are-equal philosophy, and evidence-based, completely transparent analysis of charities to get the most benefit out of every $ donated – I worked hard for that money, so want to be sure it makes a difference! I also know that you are very thorough in your research and analysis and wouldn’t just give the majority of your donations to a single charity without the due diligence – that makes me extra confident that I’m donating my money to the right place.

    Just a final tip for any Australian Mustachians out there (like me): currently in Australia donating directly to Givewell or Givewell recommended charities (apart from Against Malaria Foundation) is not tax deductible, however you can still donate to Givewell-recommended charities through Effective Altruism Australia (effectivealtruism.org.au). They’ll pass on 100% of your donations to your Givewell charity of choice, and your donations via EAA are tax deductible in Australia. Which means you can donate even more :)

    Thanks heaps for an awesome blog MMM, my girlfriend and I are well on our way to a partial passive income that will allow us to quit full-time work soon and really enjoy life and the things that truly matter in life.

    • Mr. Money Mustache December 6, 2017, 10:45 am

      Thanks Pareto – I’m responding to this just to highlight it for any other Australian givers.

  • Kaydee December 6, 2017, 12:20 am

    Hi MMM,
    I love your reasoning, attitude and approach. Whilst I believe all the choosen NGO’s are excellent and worthy organizations and deserve every dollar they receive, I do think that in your case, an alternative approach is possible too.

    What about using the profits of the co-working space to make Longmont a more sustainable town. Think global, act local. Supporting local start-ups on energy, mobility, local food strategy, loneliness amongst the elderly, etc … creating an even better community… These initiatives often need high risk seed money and a network. MMM HQ could offer both.

    I realise that, objectively, human needs are greater in other parts of the world. At the same time, we all have an opportunity and responsibility to act locally.

    Keep up the good work,
    From your Belgian fan!

    • Mr. Money Mustache December 6, 2017, 10:43 am

      Thanks Kaydee – we will definitely be doing that with HQ income as well. This international stuff is not a pure ideology on my part, it’s important to have fun locally as well.

      Plus, you could argue that the publicity this gets within the town and the US will spur further change, making the impact much bigger than, say, one bike rack here or one Thanksgiving dinner there.

      • Kaydee December 7, 2017, 12:58 pm

        Indeed! the impact can spread, and boy does it need to. I can see 2 ways in which it could spread:
        Firstly, Mustachianism spreads and conquers the world and in its slipstream, MMM HQ subsidiaries pop up all over the place. Secondly, sensible and fun local projects, technologies and business models spread from Longmont HQ, simply because they make sense – financially, socially and ecologically. Even if – gasp! – people have never heard of the MMMMovement.

        It is insane how much change is needed, urgently. The great thing is that we can change faster now than ever before in history. That is why it would be great if this platform could share some of the successes/failures of the Longmont experiments so the learning speeds up, in all directions. In that sense, today, there are already many Longmont’s across the world. Sharing and learning would benefit all. Here’s another project for you ;)

  • Stuart December 6, 2017, 3:53 am

    Hi MMM, so I spent my childhood learning and absorbing frugal habits , from the parents,left home aged 19 with next to nothing, got a job…………..all good my frugal life continued merrily along. My only debt being a mortgage – we are big on house ownership in the U.K.,I made sure I kept the borrow manageable and had no issues paying when interest rates rose. Aged 29 father, having worked all his life started to make extra profits in his business – this was well deserved for all the years of enterprise. He started to give me cash, you touched on this in your opening. Initially this was………well I felt like the luckiest person alive, just to create a buffer of secureness by paying off the mortgage.
    The cash kept rolling in, suddenly I was being gifted up to 5 times my salary every year……I treated myself to some long held desires – you know what’s coming – a nice car – paid outright with cash. This when the horrible truth sunk in…….I felt bad that the sales guy was being extra nice to me & I felt bad I had a nicer car than colleagues that I had not really bought myself, some other splurges made me feel the same way, it also hit my sense of self worth and role in the family. Action stations, I invested the money and live on my salary only, I know there are funds if I get a crisis bill, frugality has returned. The problem hasn’t though, me and father argue I’ve asked him not to give any more, he wants to overload his grandkids, set up trust funds, I put the brakes on this, I’m happy to give them starting help but expect them to get jobs and sort themselves out – what is the way forward?

  • BigMig December 6, 2017, 4:32 am

    Most cities/regions have a local Community Foundation, They offer Donor Advised Funds (DAF’s), along with guidance on philanthropic efforts. Most maintain a great database on charities – their focus area, leadership, and efficiency information. They can help source areas of interest and guide you to apropos 501c3’s that match your particular interest, and help you decide how to be involved.

  • mjcutri December 6, 2017, 5:15 am

    I was surprised when I didn’t see that World Bicycle Relief (WBR) didn’t make your list of charities considering that you are such a big supporter of bikes and your interest in helping improve health and education in developing countries. You might want to consider adding them to your list for future donations.
    “WBR has built programs to provide specially designed, locally assembled bicycles for students, healthcare workers and entrepreneurs across Africa, South America and Southeast Asia. While the bicycles themselves help individuals conquer distance and increase their carrying capacity, WBR has also created new economic opportunities by training field mechanics and employing bike assemblers to support our local programs.”

    I have no formal connection to WBR other than donating to them.

  • Nice joy December 6, 2017, 9:18 am

    Thank you for lighting the fire.

  • Steve K December 6, 2017, 9:25 am

    For those of us who have not yet taken the leap to early retirement and are still working for ‘the man’, please consider: many corporations (including mine) willingly do a dollar for dollar match for employee contributions to recognized charitable (non-religious) organizations. We find when we donate thought my company website, we instantly DOUBLE the funds the entity receives do to the company match.

  • KK December 6, 2017, 12:53 pm

    I like to donate money to charities in my family member’s names as their Christmas gifts, in lieu of actual presents. I feel good about not being a consumer, and they feel good too knowing the money went to a cause that they care about. Cheers!

  • Brian December 6, 2017, 1:20 pm

    I was curious about your thoughts on two different schools of thought related to giving, rooted in the concepts of investing that you teach – mainly compound interest.

    Warren Buffett has stated that he will give away 99% of his wealth. “Mr. Buffett intends to have all of his Berkshire shares given to philanthropy through annual gifts that will be completed ten years after his estate is settled,” according to a statement released by Berkshire Hathaway.”
    The belief being that his donation can have more effect the longer he waits to make them, due to compounding interest. The total donation will be larger the longer he waits to make them.

    As well as investing with the plan to donate. For example based on the dollar amounts that you are able to donate, in your opinion is it better to donate $20,000 to wildlife/ conservation groups today. Or purchase a hard asset like acreage in Colorado, for the purpose of conservation.

    I enjoy reading your insights and thoughts.

    • Mr. Money Mustache December 6, 2017, 3:11 pm

      My theory is that these environmental groups are doing much higher leverage stuff than me just buying expensive land to hold off development. Also, Colorado land is not very high-value from an ecological perspective, compared to rainforest. Amazon Conservation Assoc purchases big swaths of critical amazon forest, and leaves them open to non-destructive uses (including tribes who may live or hunt there), for cheaper than I could get a dusty patch out in the prairies.

  • SMM December 6, 2017, 2:01 pm

    Great topic! I remember the ALS Ice Bucket Challenge that took place a couple of years ago. People donated and nominated others as well. I gladly participated and encouraged others to do so too. As a result, the organization raised more in from that endeavor than years past. This type of paying it forward philosophy makes giving unique and fun to people whom would normally not consider doing so.

  • John December 6, 2017, 3:05 pm

    I think it would be really cool if you created a template for other “branch offices” to be opened around the country.

    • lurker December 12, 2017, 4:28 pm

      Brooklyn is ready!!!!!

  • Andy December 6, 2017, 5:07 pm

    Hi MMM, could you see if a guest could write a similar article specific to Canadian taxes?

  • Brady Faught December 6, 2017, 5:18 pm

    I can’t quite agree that one should feel 100% financially independent before donating. It’s rare us ever-demanding humans ever feel a state of ‘enough’ in any aspect of our lives. So I’d suggest if you’re young and saving, to still give something- $5, $10, $20 a month to something you believe in. It gives you the happiness boost, and sets you up for donation success as your salary gets fatter down the road.

    • WantNotToWantNot December 7, 2017, 6:28 pm

      I agree. Give a little as soon as you can. I truly don’t believe in magic—-but there is some kind of magic involved in giving, as you really do get it back tenfold. That’s been my experience.

  • Doug December 6, 2017, 9:12 pm

    For me, donating is a combination of finances and my time. Both are important. To be honest, there are moments where I worry whether it is ‘responsible’ to give when I have little ones at home that depend on me. At the same time, I want to model for them the life I would hope for them to grow into. As a medical professional, I volunteer in my community and abroad. We give to domestic and international groups. I have a soft spot for microfinance lending and for clean drinking water as both give back so much. Giving helps others but at the same time also helps keep me grounded on what matters most, what is ‘enough’, and who I would hope to be. Be the change in the world you hope to see. My hope is that this can be one of the best gifts I can ‘responsibly’ offer my children.

  • Barak PazTal December 7, 2017, 2:48 am

    Hi MMM. Loved the co-work idea and interested to visit.
    I am the author of 100 vacation days a year and i follow your blog for
    almost a year now, and i find it a great source.

    I personally love Kiva.com – there main advantage is that they help facilitate micro-lending
    to struggling business all over the world while saving the interest to the business you lend to.
    0 interest. I started with 75$ micro lending to three businesses in Kenia, Guatamala and the palestine teritory, soon to become the palestine independent state. All are agricultural businesses. After a month you start receiving the monthly installments (no interest, just the initial loan) and after a while when you have 25$ you can donate again. This is like harvesting plans and using the fruits to generate more loans. The 4th business was in Myanmar and now i have sufficient funds for my 5th loan :)

    I think this is a great choice also for the poor to start the positive power of free unconditional Love & Give away.

    Love, Barak

    I had a Mongolian IT manager in first start up in China that said “If i get used to the giving away when i am young and poor, I will get used to the idea when i am rich”. That inspired me. Keep on the great work!

  • Lady Dividend December 7, 2017, 5:24 am

    Your generosity is very inspiring MMM. You’ve taught us to think critically about every dollar we spent and the whole point is to spend more on the things which maximize happiness- including charitable giving.

    Although it’s not a charity, every month I give to Bullfrog power which invests and supplements alternative energies. Every time I read of a new initiative or job creation, I get to feel a surge of pride that I helped with that.

  • Michelle December 7, 2017, 7:20 am

    Nice… DH and I make pretty robust salaries so I find it hard to justify keeping the purse strings shut when it comes to charitable donations. I probably donate too little to too many (as opposed to more to just a few; and nowhere near your numbers) but it’s hard to limit them! There’s so many good causes out there.

    Just for fun here are some of mine:
    For world progress and helping refugees: Mercy Corps & BRAC
    Environmental conservation: The Nature Conservancy & The Chesapeake Bay Foundation
    Social justice: NWLC, NAACP LDF, & NARF
    Natural Disaster Response: All Hands & United for Puerto Rico
    For the Veterans: The Gary Sinise Foundation
    Occasional fundraisers by close friends for personal reasons (i.e. helping a loved one pay for cancer treatment costs)
    I also usually say yes on those last minute donation requests at store checkouts like the grocery and pet supply store…

    I like the idea of seeing the tax benefit in real time; I typically just plug all the receipts into my tax returns and take a guess…

  • Philip December 7, 2017, 9:08 am

    MMM, have you heard of Trees for the Future (trees.org)? It seems up your alley. They help farmers feed themselves and their families, as well as providing them with an income and restoring depleted soil through tree farms. It’s a charity that seeks to provide food security and a way out of poverty, but also helps the environment as a side effect. It has a good score on Charity Navigator too.

    And I’d also like to plug Ecosia.org. A search engine that does something similar using their ad revenue.

  • veganomie December 7, 2017, 9:40 am

    I have very small savings. SENS Foundation is working on the most important problem humanity faces. Another idea you may not know about: Ebay. I’m becoming minimalist, getting rid of stuff, and you can choose to donate a portion of your earnings to charity. Plus, Ebay deducts it from your future listing fees, so win-win!

  • WantNotToWantNot December 7, 2017, 6:22 pm

    Dear MMM,

    This is such a wonderful and timely column on the importance of Charity as an aspect of living the Good Life. Thank you!

    It was through reading your posts and also those of Mrs. Frugalwoods that I began to investigate Donor Advised Funds. Even though I’m still working (for a couple more years because I love my job), we are FIRE and philanthropic, but had been giving to our causes in drips. This year we started a fund through Vanguard Charitable (which demands a $25K initial investment and gifts at $500 minimum), with appreciated stock and getting an immediate and quite nice tax deduction for 2017 (yes, I hope this deduction will be possible in the future). Having this DAF has made us, as a couple, more strategic in our giving, so rather than writing smaller checks willy-nilly, we discuss our gifts more thoroughly, and making larger donations (this is more efficient for the charities too).

    For Christmas this year, we will have our four grandchildren with us and we will give them each their gift (some to spend, some to invest) and then we asked Heifer International to send us four catalogues—this is the charity that will send bees, chickens, goats, sheep, etc., to those who need livestock. The catalogue is very attractive with animal photos and all kinds of options and explanations about how valuable these living gifts are. We are going to give each of the grandkids $150 to “spend” on a gift of their choice from the catalogue (or they can pool their money to give larger animals). Through this process, we aim to engage their imaginations and involve them in the process of charity; the whole family is generally philanthropic, so the experience will not be entirely foreign to them, but we’ve not done this as a Christmas activity and we hope to make it a tradition.

    Next year, we may look around for a different charity, as I’ve become aware that Heifer International is not quite as efficient as some other charities (they are not terrible, but a little spendy when it comes to the costs of their marketing….those lovely catalogues do cost). Any suggestions will be welcome!

    So that’s our Holiday Story — sending GRATEFUL THANKS to MMM and all the FIRE community for helping to make the world more sane and more giving!

  • Rybo December 7, 2017, 7:29 pm

    Great read — I wish I had read something like this years ago. I did it backwards and gave away too much too soon. Some of it not to charitable contributions, too! >doink!< Can you write an article on how to go back in time and undo mistakes? :) Some of the giving was completely worth it, though — even sacrificially to those less fortunate. I also tend to give more in tips to those in service industries because those can be some of the hardest / thankless jobs with less pay.

  • Randy R December 7, 2017, 11:30 pm

    I read The Life You Can Save this year and it was one of the best books I read this year. Come to think of it, another book you recommended was even better (A Guide to the Good Life). Back to the giving though. Before I read TLYCS I was donating 1% of my income to charity. I’ve now upped it to the recommended amount through thelifeyoucansave.org. My company matches $500 a year and I was able to take advantage of that. Out of my paycheck 500 goes to a local food bank, and 500 goes to the give well grants. I have $120 left over every month to give to whoever I please. Sometimes it’s a charity such as Give Directly, sometimes it’s a politician but it is good to be able to be flexible.

  • Brian Maida December 8, 2017, 12:21 am

    I hope that you might consider donating to causes that promote veganism. Going vegan is by far one of the decisions that you can make and implement in a short period of time that will bring the greatest benefit to animals (human and non-human) and the planet.

  • Danielle December 8, 2017, 8:29 am

    I love you! I’m financially comfortable with very little debt (a small mortgage, no car!) so you are a great source of inspiration for me. I don’t always agree with you (the Dairy Queen trip with your in-laws… you were party poopers!) and while I haven’t made any direct changes to my lifestyle yet, you keep me thinking, and thinking twice. Thanks so much for your generosity and perspective! Happy holidays to you and your family from Montreal! xo

  • FIRECracker December 8, 2017, 10:05 pm

    Thanks for all the tips on giving! I’ll always be in awe that you are still living on 24K/year while giving away $100K. Many people would probably increase their cost of living as their earnings in retirement go up. But you didn’t. Way to practice what you preach! :)

    As for donating, let’s not forget that on top of charitably giving, giving your time is also valuable (like you did giving away 700 hours of sweat equity to the Headquarters). Often times, we think of money as soon as we talk about donations, but there are so many people out there who have given away countless hours of their lives in service to the world (ie Mother Teresa) so that’s another thing us early retirees and Mustachians can do, in addition to the monetary donations.

    Thanks for setting a great example in generosity, MMM! Ditto with Physician On Fire. The world needs more people like you.

  • grogounet December 9, 2017, 9:38 pm

    think i got an idea. i will take everyone of your articles and translate within australian legislation to make it valuable for us ! it s way too good to be left for the us alone

  • Dan December 10, 2017, 7:03 am

    This post brings forth a true admiration in me. Mr. MMM is an example of being blessed by living right. He is spreading the goodness to others. Should I do more to follow his example? There are lots of very good people who post herein. I get a positive lift from their input.

    Becca said :”I am also worried that this new tax plan would eliminate the tax benefits for charitable giving for most Americans.”

    kruidigmeisje stated: “The CEO of the Health Ensurer I am with (dsw.nl), lives this way: he donates his salary to the company & good causes. He likes his work, and doesnt need the money.

    He is not well liked in politic circles of the insurers world in our country: he says his mind, which focuses on the client (the insured person who should get care whenever necessary) even when politics sways towards financial profit or political safety.”

    This is what scares me. I am not retired yet and will be buying my own health insurance. The top dogs in US government do not seem to be doing anything to help us with our health. I am putting aside a large pot of money to help pay premiums in the 3 years until I am 65. Health companies seem to have no qualms about taking large sums of money from people. So – I am retaining my money until I retire and maybe I will see it will not be as bad as I envision.

    Wouldn’t it be just as good if I volunteered my time after retirement to worthy causes? While working, I have no real planned free time so it will have to wait a bit.

  • Danielle Bartholomew December 10, 2017, 8:41 am

    Hi! I’m finding it surprising to see comments from readers who are apologetic for not donating or being able to donate as much as MMM. I think this misses the point. which is that if you can and if you want to, donating can be a win for everyone.

    Those of you who are donating anything – for Pete’s sake don’t apologize! Bravo and thanks for your generosity! And for the rest of us – hey we’re doing the best we can! No apologies necessary. :-)


  • Javi December 13, 2017, 7:02 am

    Very interesting as always, with content that makes you think. My philosophy about donating is different. I explain it here not to criticize but to offer one more POV.

    I prefer to donate regardless of having achieved FI -which I have not. Reasons for me are (1) the majority of people in the advanced economies are anyway wealthy compared to 50% of the world population (2) Whether it is 1 buck of 1 million, most of us can part with some money and not threaten our future even if that means you will need to work la bit onger (3) exercising generosity is always a no-regret (4) I could die tomorrow and I would rather donate before I die.

    If I look at the business case, it is probably better to wait and donate MORE when you reach FI. But, you know what? I don’t really care because, again, I don’t know what tomorrow will bring. And nothing stops me from making a big donation down the line, when I too reach -in years- FI.

    Have a lovely day,

  • Laura December 13, 2017, 12:03 pm

    We give $400 a month to charitable causes. This is a ton of money for us and we just started with such a big number this year. I keep a spreadsheet of the giving. Some goes to tax-deductable organizations, but most goes to “support”, which includes random acts of kindness, gifts for mail, trash, teachers, go-fund-me’s for friends and family, making meals for moms with new babies, ect. I also charge $10/hr for my own volunteer work and add it to my giving. This has really encouraged me to volunteer! Today I volunteered for 2 hours and wasn’t upset when the women was 20 minutes late to meet me. It truly adds to my life to give. Since I’m so frugal I have to push myself to do it, but it really makes me happy!

  • EricL December 16, 2017, 11:23 am

    tl;dr: Love to give but do any of these methods allow for anonymous giving? I hate being marketed at.

    I enjoy giving to charities. With the Charity Navigator website I can determine the most worthy charity for any particular cause.*

    My big issue isn’t giving. It’s the massive by the numbers marketing shit show follow up. Not only does every charity I give to spam me daily for more money. But my contact info is routed to a 100 others who spam me too. Then come the calendars, Christmas cards, and customized mailing address stickers and straight up paper spam. A $10 donation to save a Brazilian rainforest acre translates into 2 US forest acres cut to churn out this crap. The Catholic Church sends me these faux gold coins with angels on them. The worst is the kids charity that sends me 7¢ in coins with pathetic starving kid pictures. After researching it, I found it was one of the “bad” ones. So I make a point to keep their money.

    QUESTION to MMM: Can any of these techniques be anonymous? I don’t give a shit if I get a tax break. If keeping Uncle Sugar’s paws off my ‘stache was that big a deal I’d focus on more tax shelters and offshore accounts info. I just want to save the world and not feel like a chump or get compassion fatigue for trying to.

    *I don’t buy that bullshit TED talk where the lecturer advocates it should be OK to pay charities with massive operating costs. Most charities can function fine with 10% of their donations routed to operating and fundraising expenses. Some extraordinary ones like Direct Relief can function on 1 – 2% Some of these self liking ice cream cones actually route 75 -90% of their donations into operating expenses – though more likely some ass hat’s pocket.

  • Susanne December 17, 2017, 4:20 pm

    All the way back in 2011 MM wrote this
    “*** Social Security: contrary to popular belief among grumpy people with limited training in macroeconomics, the Social Security fund is absolutely NOT going bankrupt, it will simply adjust to a modestly lower level of payouts than currently scheduled. More on that in a future article.”

    Did he ever write that article?
    I think a “modestly lower payout” is very optimistic. They won’t go bankrupt (since the government can print money) but the real world purchasing power will be a lot less than many people think.

  • Marcus December 18, 2017, 2:35 pm

    I’m not a tax advisor but MMM might have been able to get a larger tax deduction by taking advantage of Colorado’s CCCC credit if he wanted some money to flow to child care philanthropy.


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