Want to donate money regularly? Here’s how you can save systematically

You can give some money for social causes at all income levels

Does more money make you happy?

Think again. Numerous studies have shown that once a person’s basic needs are met, the correlation between income and happiness becomes weak. This means, beyond a point, money will no longer add to your happiness. So, what can you really do to find a deeper level of happiness and contentment in life?

There are many individuals who have incorporated philanthropy in their lives. It is called “the joy of giving.” That is, doing your bit by giving back to the society or environment as it can be fulfilling. This holds true when you do charity simply for a good cause and not because you expect something in return.

Many celebrities and industrialists such as Ratan Tata, Azim Premji and the Ambani family have charitable trusts. So, giving can become a way of life for them and benefit the society at large.

If you ask me, you don’t have to be ‘rich’ to do charity. But is there a way to save systematically for your charitable acts?

Charity begins at home

The good thing is you needn’t look far to start doing charity. Begin with your domestic staff, their families etc. and see what a small gesture on your part can mean to them. You could sponsor your domestic help’s children’s education or pay the doctor’s fee when your driver or his family members fall sick. It’s a deeper level of contentment that no gadget or material joys can bring!

Those who have embraced this mantra will tell you that this is the budgeting rule they follow:

The right rule is Expenses = Income – Savings – Donation (Charity)

For instance, the “LPG subsidy” is directly credited to the Aadhaar-linked bank accounts of beneficiaries, eliminating middlemen and ensuring transparency.

The incorrect rule is Expenses = Income – Savings

So, charity is a vital part of the equation when planning for monthly expenses.

The key here is that when you seek to do charity purely for the joy it brings, you won’t worry about finding the ‘right NGOs’ or seek Section 80G deductions. The focus will instead be on finding genuine ways to make a difference to others’ lives.

Why should you donate?

There are several benefits of donating. It gives you the opportunity to show gratitude.

It promotes a feeling of happiness & fulfilment. The fact that you are helping someone can make you feel empowered, and therefore, offers a deep sense of joy and fulfilment. Several studies have even proved a correlation between donating to charity and increased activity in the part of the brain that registers pleasure.

It is good for health. Can you imagine, doing charity actually offers a plethora of physical and psychological benefits such as lower blood pressure, improved stress levels, anxiety and depression?

Teach kids the importance of generosity

When you talk to your children or demonstrate the importance of donating for a cause, it teaches them how they too can make a positive difference to the world.

Inspire others to do the same & have a ripple effect

Simply by observing your commitment to bringing a smile to others’ faces, your family and friends could feel inspired to do the same. So, imagine how one good deed on your part can set off a ripple effect and create a huge impact for society!

How much one should give?

Did you know, billionaire investor Rakesh Jhunjhunwala donates 25 percent of his annual income towards charities every year?

While there is no limit to how much you should or can give to charity, the ballpark figure is anywhere between 1-5 percent of your annual income. For instance, if your post-tax annual income is Rs. 10 lakh, then deduct savings and donation contribution (1-5 percent annually, i.e., Rs 10,000–50,000), and you arrive at the amount that you could spend

How to build a philanthropy corpus

There are mainly two ways to build up a corpus for philanthropic purposes.

Every month, set aside a certain amount or percentage of income in your savings account or register a SIP for a specific amount in liquid funds. You can redeem this amount once a year and use it for charitable purposes.

If you wish to donate a significant amount of money to a social cause, you can buy a separate term insurance cover or other traditional insurance policies for the amount you want to donate and register the institution or organization you wish to donate to as the insurance beneficiary in the policy. This way the amount will directly get transferred to it after your demise.

About Author

Vinayak Savanur

Founder & CIO at Sukhanidhi Investment Advisors, a SEBI registered equity investment advisory firm. He has nearly a decade of experience in the stock markets and has been a holistic financial planner.