Have you ever thought about giving financially to support a cause that’s important to you? Would you like to leave a legacy? Do you believe that money is more than something to accumulate? Studies have shown that charitable giving has psychological and health benefits, and that it can also help train your heirs to have certain values you might want them to have. According to charitable giving expert Lorraine del Prado, some of these values include:
- Inoculation of heirs “from ‘affluenza,’ the dysfunctional relationship with money.
- Giving provides a psychological boost for those of inherited wealth, who suffer from guilt and low self-esteem from money they haven’t earned.
- Giving reduces the sense of separation from the larger world.
- Philanthropy provides good training in letting go.
- A forum for meaningful intergenerational communication.”*
Of course philanthropy offers economic benefits as well, including, but not limited to, reduced income, capital gains, gift, and estate taxes, diversification of one’s inheritance, and unlocking income from underperforming or highly appreciated assets. And while tax savings are important, they generally aren’t the primary drivers of philanthropic giving. Instead, del Prado maintains that a deep sense of community, family, and strong values are often what lead people to give.
Even though wealth is not merely a tool given that it’s needed for basic economic security, wealth can and often should be viewed as an instrument that helps one accomplish greater good for one’s self, family, and community. Personally, the idea that there’s a nexus between wealth and the greater good is exciting to me. Our society needs strong families and communities and wealth can be a wonderful means to that end.
*Private training session with Lorraine del Prado, 2017.