Episode 248 : The Extraordinary Power of Charitable Giving

In this heartwarming Giving Tuesday episode, Melissa Joy, CFP®, explores the profound connection between gratitude, philanthropy, and personal well-being. Delving into the science and practice of thankfulness, Melissa highlights how cultivating a gratitude mindset can reshape your financial habits, reduce stress, and bring deeper fulfillment to your life.

Key Takeaways:

• The Power of Gratitude: Discover research-backed ways gratitude can reduce anxiety, improve mood, and enhance overall life satisfaction.
• Philanthropy as a Gratitude Practice: Learn how incorporating charitable giving into your financial strategy can align your wealth with your values and bring greater purpose to your resources.
• Practical Gratitude Strategies: Explore simple techniques like journaling, reframing challenges, and celebrating small wins to foster a positive mindset.
• Overcoming Challenges to Gratitude: Acknowledge that gratitude isn’t always easy, especially during difficult times, and gain insights on how to approach it when facing trauma, loss, or life transitions.

This episode is an invitation to reflect on the role gratitude plays in your financial and emotional health, especially during the holiday season. Whether through intentional giving or personal practices, discover how gratitude can set the stage for a more prosperous and fulfilling life.

The previous presentation by PEARL PLANNING was intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://pearlplan.com/

Transcript

Speaker 1: 0:01

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence and be strategic in order to grow your wealth. As a woman, you work hard for your money and I'm here to help you make the most of it. Now let's get into the show. Hi everybody, happy Giving Tuesday.

Speaker 1: 0:39

We are releasing this episode on the first Tuesday in December, which is a special kind of Hallmark holiday that is all about philanthropy and giving back, and this is one of my favorite days of the year, and I just wanted to utilize it to talk about some science and information about the relationship between gratitude, philanthropy and well-being, because I thought that was a great way for you to set a mindset for the remainder of the year when it comes to just being thankful, having a sense of giving back and really making sure that your mindset is a good fit for your overall financial well-being. So this is a topic that is really near and dear to my heart and certainly, if you don't have the capacity to give or give back, I would encourage you to consider giving with your time, but I think that everything is so related and can be so purposeful and powerful when you're thinking about wealth and money wisdom, to really be thinking about your relationship with charitable giving, be thinking about your relationship with charitable giving. So, just to get started, we just passed Thanksgiving and actually I'm recording this in my cottage up north. If you're looking on YouTube you can see the background is a little different than usual. This is where I'm going to be hosting Thanksgiving, so hopefully everything went smoothly by the time you're listening to this episode. But it's certainly a time where we all have some space and time to reflect and think about what we are grateful for. I also know that not everyone listening is in a moment where they feel set up to feel grateful, and so you can just take a pause and skip this episode if you're in a moment in time, which is very difficult and or listen and bookmark it because it doesn't have to be right for you right now.

Speaker 1: 2:48

Reflective there's a lot of great like kind of science when it comes to the study of having gratitude and what that does for people's circumstances and well-beings. I've done a lot of work learning more about wealth and people's financial health and it's so interesting. So much of it doesn't have to do with how much money you have. In fact, many studies indicate that while money may buy happiness up to a certain point, after that it's kind of on you, and so there is a you know kind of disconnect in some cases between the thought that, like, if I just have more I'll be okay, and which is, you know, money can make you safe and perhaps comfortable. But then it's about you and your mindset in order to find pathways toward better well-being or more happiness. And interestingly, there's a lot of intersection between financial research and mental health research and a lot of studies on the mental health side of things, especially in the positive psychology world, indicate that a sense of gratitude and thankfulness can go a long way to your overall well-being. It kind of sets the table for a good mindset.

Speaker 1: 3:59

Some of the statistics that are available in studies and easily findable in, for example, google would include 5.8% higher mental health for groups that have gratitude interventions. 7% lower anxiety symptoms, 6.9% lower depressive symptoms, greater overall life satisfaction or positive emotion, less worry and less psychological pain. So of course, this is not just a guarantee that if you start to feel grateful, that you will automatically feel better. And in certain cases, like if you force your kids to write thank you notes, studies indicated that that might be great for the the relative or grandparent or friend who receives the thankful note. They feel good about it. The kid doesn't necessarily have the emotional maturity to feel like that really, you know, kind of gave back to them. And in cases of people that have experienced trauma one study was for a group of women who were recently divorced they didn't have more well-being with gratitude interventions, and so it's not always the case. But in a general world, for a more broader population, that may be the case. So how can you have that gratitude? One would just be journalizing and exercising. You know a way to like find the silver linings of moments or find the moment, the reasons to be grateful. This is again very interrelated with having a purpose. Sometimes you may choose to have a one-time act of gratitude, saying thankful thank you to the people that are important to you, writing notes to people who have made a difference in your lives for the year, counting your blessings might even make your you happier as just an exercise of like kind of a once-a-day reflection or meditation, and even expressing gratitude within in your work.

Speaker 1: 6:06

But I've always also thought that philanthropy had a great interaction and relationship with gratitude. When I think about my own charitable giving, oftentimes I assess the things that our family has to be grateful for, good circumstances generally, when it comes to money and we have the ability to give in some cases, we try to make that a part of our annual giving, and studies also indicate that philanthropy can have a positive impact on your mental health, that that can decrease your stress levels, improve your moods. Most importantly perhaps, when it comes to wealth, provide you with a greater sense of purpose. And one of the things that when I said money can't buy happiness that we know is that people often really need a sense of purpose that's not just tied to kind of an unlimited stream of income. That's why oftentimes there's, you know, a lack of happiness outcomes for, for example, lottery winners. They may not be able to tie, they may lose their identity with work or not have a sense of purpose and also have a lot of things pulling them down, including other people asking for funds. Studies have shown, for example, with volunteering, that there was an overall improvement of well-being on surveys asking about how people felt, and sometimes philanthropy and volunteering can, excuse me, even be linked to longer lifespans and better health.

Speaker 1: 7:49

So, on this Giving Tuesday, I wanted to remind you of the power of gratitude, also the power of philanthropy. And then, finally, on this episode, I wanted to talk to you about a few ways that you could give, and I want to talk about that as a financial planning practitioner, so you can make sure that if there are certain areas you should explore because this is a short episode, that's just kind of a quick hit of like maybe this, maybe that you know where to be looking and what to be thinking about. First of all, of course, it's lovely to start to reach out to charitable organizations and start to volunteer your time, and that might not be something that you complete today, but you could set an intention for the following year of hey, all things being considered, I would love to start to volunteer because I think that would enhance my life. Perhaps it would connect you with people that are similarly minded, who care about organizations that are similar to the organizations or causes that you care about. That is a great way to kind of give back and also give to yourself. Second, of course, there's gifts of money, and, on a day like Giving Tuesday, charities really love your intentions and you can easily click a button and make a gift, make a note of what you've given and, depending on how much you're able to give, that can result in some tax advantages. Who listens to this? To Women's Money Wisdom, because you do have growing kind of balance sheet and growing net worth. You may be thinking about and I hope you are, if you're in that circumstance and you have, you know, kind of a general generational legacy how to prepare your kids to handle wealth.

Speaker 1: 9:39

And, interestingly, one of the best things to do is to bring your kids in to talking about family values and then perhaps even doing a year-end gifting project with them where you make a charitable gift as a family to either an organization that you all agree upon together. A great example if families really love animals and have dogs and cats or love them, you could give to the Humane Society. My daughter really loves St Jude's commercials and the work that St Jude's does in medical treatment for kids, and One year we had a project where each kid got to decide how much was given A small amount like in our case. I think it was either $100 or $250 per person, but we were making the gift but the kids got to choose who things were given to, and that really excited our kid, jo, because she wanted to give back to an organization, to St Jude's, or it may be an organization that your family or your kids are involved with, so then you could talk about you know kind of making that gift. Then we get into a giving level where you may also be wanting to get a tax break.

Speaker 1: 10:51

A few things that I would mention there that could be relevant on Giving Tuesday or any day you intend to give. One is if you're someone who has stock that has made money and is in a long-term capital gain. That means that you invested in something stock or bond, that it was more than 12 months since you originally purchased it and, additionally, you then are continuing to hold it and it has a gain. You could give away that stock either to a charitable organization or to something called a donor-advised fund, which I'll talk about in a moment, and if you are in a circumstance where you're able to itemize on your taxes, then you could get a tax break for the amount that you gifted as well as you've given away. This is a concept that's a little more difficult to grasp, but you've given away a future tax liability Because potentially you would owe taxes if you, let's say, instead, you were like, hey, I want to give $2,000 to CharityX and you sell your stock and give that $2,000. But if that stock had happened to grow by $1,000 from when you originally bought it, so 100% appreciation you might owe on taxes on $1,000 capital gain which, depending on the person, might cost them $150 to $240 or so in some cases. Some people could be in a tax bracket where they would have not paid a tax on it. But you would have avoided that $150 to $240 if you were in a higher tax bracket by giving the stock to the organization before you sell it, because they don't pay taxes when they sell and are giving it to a donor-advised fund, like I mentioned. So that's one tax advantage strategy. Giving it to a donor advised fund, like I mentioned. So that's one tax advantage strategy.

Speaker 1: 12:44

The donor advised gift in general allows you to control. You may be giving. Let's say you give $2,000 every year and you want to kind of pre-fund because you have a very high tax year, or this is really great if you are somebody who has restricted stock units or non-qualified or incentive stock options where you're getting paid and company stock. You may be eligible to kind of do a bundled gift now so that you can have a budget that is already getting a tax advantage this year. So you put money into a donor advised fund, you get your tax break at that point in time, which could be 2024.

Speaker 1: 13:19

And then you have a budget let's say you gave $20,000, and then you have a 10-year budget for gifting, because you tend to give $2,000 a year, and then you would get to wait to write your checks until a later point in time. Or you could write $2,000 today and then give over time and in fact that money could be invested, so perhaps it would grow. So you were even able to give more to the charities over time. There's some other nuances to donor advised funds. So I would suggest, if you're interested in that, if it rings a bell of something that, oh, maybe I could do, that you should talk to your financial planner or certified CPA about it. And then, if Thank you for listening to the Women's Money Wisdom Podcast, if you found value in this episode, the best way you can support the podcast is to forward an episode to a friend or leave a review. Go to pearlplancom and the podcast link to get all the resources and links mentioned.