Giving a little of what we have to others helps boost our own level of happiness. And yet, before we give to just anyone or any cause, it’s important to bear in mind three criteria that will ensure our giving is as beneficial for us as it is for the recipient. Here’s everything you need to know.
In the article entitled “Giving: a personal investment that makes the world a better place”, we argued that giving brings us more happiness than receiving. And it’s true that we get more out of spending money when we’re buying or investing on behalf of someone else rather than ourselves. Maybe we won you over with our reasoning and now you want to give away some of your assets to make your savings more meaningful and boost your well-being. That’s great! But remember to look before you leap.
For your gift to be a source of personal satisfaction, there are several criteria it will need to meet. We would even go so far as to say that there are three golden rules when it comes to giving: social connection, effectiveness and autonomy.
Giving your time or money to help others is more gratifying when it enables you to build social connections. This is possible when, for example, we can clearly identify and reach out to beneficiaries or when we support a cause that affects us directly. That’s the first criterion.
That could mean getting involved with a charity that works in your neighbourhood, supporting current students at your university through its alumni network, or even giving money to cancer research after you’ve been touched by the disease personally in some way. A birdwatching enthusiast may prefer to give to a charity that protects ecosystems, whereas a music lover might support a musical charity.
One-off donations definitely have an impact, but regular giving really nurtures this social connection and sometimes opens up opportunities to meet people working in the field. You have a vast array of options to choose from, so look for the ones that really speak to you.
You may choose to donate to reputable charities such as the Fondation Cancer, SOS Villages d’Enfants Monde or Médecins du Monde. Equally, you may prefer to give to a small, local charity working in the fields of social outreach, culture, sports or health care. If you’re still not feeling inspired, maybe you could find out more about the beneficiaries of L’Œuvre Nationale de Secours Grande-Duchesse Charlotte (a national charitable foundation in Luxembourg). By describing the beneficiaries and explaining how donations are spent, this organisation undoubtedly meets the second key criterion for a gift that contributes to our happiness: proof that our commitment has made a tangible difference.
Your donation will only have a genuine impact on your happiness if you have a tangible way to gauge the difference it has made.
Demonstrating effectiveness and measuring social impact
As a pro-social investment, your donation will only have a genuine impact on your happiness if you have reason to believe in its effectiveness. In other words, you need a tangible way to gauge the difference it has made.
That’s why it’s important to prioritise organisations that make a point of showing the results they have obtained in relation to their chosen cause or their progress towards a specific aim. You could even broaden your search beyond NGOs and choose to get involved in projects that are not purely philanthropic. For example, if innovation is your thing, you could use a crowdfunding platform to give to a start-up with a project close to your heart.
If the thought of crowdfunding makes you uneasy, microfinancing and impact investing are two topics to explore with an adviser at your bank. They will help you see the bigger picture and ensure you make well-informed decisions. That is the third criterion when it comes to giving well.
You should feel free to choose a cause close to your heart and only give what you believe to be an appropriate and fair amount
Giving freely with full knowledge of the facts
The third essential condition when it comes to pro-social spending is that the giver must be well-informed and completely autonomous. That means that you should feel totally free to choose a cause close to your heart and only give what you believe to be an appropriate and fair amount. A donation made under duress will never result in the desired sense of satisfaction. It’s OK if your preferences are different from those of your nearest and dearest; if you want your donation to make you happy, you should just try to live up to your own values.
Don’t worry if you haven’t yet found a cause that lines up with your values and gives you that all-important warm fuzzy feeling. You could start by visiting the website of the Fondation de Luxembourg, which lists over 80 charities that would be only too happy to benefit from your generosity.
Whatever you decide, your donation – like any other investment – must be fully thought through. And that’s all the more important when your happiness is at stake. Going through the thought process isn’t enough by itself, though. You also need to choose the right mechanisms and steps to ensure that your generous donation has a real impact on your chosen cause. To that end, it’s a good idea to seek advice from your bank adviser, who will also be able to share information on ways to donate and possible tax deductions you may be entitled to. After all, Luxembourg is a country where philanthropy and acts of generosity are strongly encouraged.
So, what’s the takeaway from all this? Above all, this is simply an invitation to reflect on the theme of giving and happiness based on research from the fields of economics and social sciences. And if these musings prompt you to increase the amount you donate, we hope you will bear in mind the three criteria discussed to maximise the personal impact of your generosity.