This is the season for giving. What are our priorities?
Posted on December 28, 2018

It’s that time of year that Patti and I make sure we’ve given what we want to give to those we care about. We always spend and give our annual Safe Spending Amount (SSA). As in the several past years we have not spent it all, so in October we figure out who we want to give to and how much. The purpose of this post is to discuss some of our thinking. I mention some priorities for us in Chapter 10 and in the Tom and Patti file at the end of Part 3, Nest Egg Care.


==== Our SSA for 2018 was more ====


As background, our SSA for spending in 2018 was $54,000 relative to an initial $1 million Investment Portfolio in December 2014. That was 20% more that our SSA for 2015, the first year of spending in our plan. We did not have that much more for gifts this year. We spent more to enjoy on travel than in any year of our lives. The big trip for us was Africa in September: we saw parts of the world we have never seen and likely will not see again. We loved the trip. Africa deepens our understanding of and connection to the natural world.


==== Our priorities for giving ====


1. Family. We all want our children and grandchildren to be successful in life. Helping them now is a lot better than helping them after we are dead – a date that Patti and I hope is in the distant future. Patti and I don’t have children. We have siblings, nieces, nephews and their children. We decided on a general amount we want to give our nieces and nephews before we are both dead. We’re not far from that total now.


We give them some mad money this time of year, but we think of our serious gifts as something they will invest, let compound and grow, and use in the future. As an example, we gave directly to their IRAs in 2017; in one case, our gift will compound by a factor of 16 following the Rule of 72. Nice!


We also like gifts to UTMAs or 529 plans that the parents (nieces or nephews) have opened for their children, often at our request. These were our primary gifts for 2018. Our annual gifts will compound but for not as many years as the gifts to retirement accounts. The money we put in this year for Luc, age now 2½  months, might be 4X in spending power by the time he is 20; the money we put in next year might be 4x by the time his is 21. And so on.


2. Helping Others: reduce human suffering now. This is the highest priority for our gifts. The main focus is on actions that can save lives. An example is that our gift can do something that reduces death from a disease. We like three organizations, and we judge them to be very effective. I’ve worked with a number of non-profits here, and some have a great mission but are not efficient and effective. Effectiveness is a key criterion for me. Here are our top three.


GiveWell’s evidence-based approach estimates the impact of a donation in terms of lives saved. GiveWell also follows up on the effectiveness of programs they have recommended; they had a change or two in programs they recommend for support this year based on their evaluation of effectiveness. I really like the evidenced-based approach. I also like that 100% of what we donate goes directly to a first-line organization.


We both like Doctors Without Borders. I don’t think we can go wrong on the mission of reducing human suffering or its effectiveness.


We like Oxfam America’s work with partners in the countries they serve to build capacity to solve problems themselves. We gave an extra amount in 2017 and again in 2018 for Oxfam’s initiative in Puerto Rico after hurricane Maria. Patti spent two years in Puerto Rico from age 9 to 11 when the Navy stationed her father there. We spent about two days in Boston last year to learn more about Oxfam’s programs and effectiveness, and we’ll spend more time in 2019 to learn more.


I conclude that climate change – global warming – has the biggest potential future impact on human suffering and on life in the natural world. The impacts will adversely affect 100s of millions and dramatically change the natural world. I find it very strange and discouraging that we humans have difficulty agreeing that CO2 and similar molecules discharged by man’s use of fossil fuels are raising temperatures and that none of the consequences are favorable for our future. I liked this recent video that shows that we are making progress, but just not fast enough. I am struggling to figure out how our gifts might help solve this problem.


3. Helping Others: help the disadvantaged live a better life. Our largest single gift provides better educational opportunities and life experiences for children from poor families. I’m on the board of the Propel Schools Foundation which supports its 4,000 students in 13  charter schools generally located in poorer performing school districts in this region. Students at Propel’s schools academically perform about 30% better than their peers.


4. The balance of our other donations is mostly for organizations that are the fabric of our local community. Our biggest donation is to our local United Way. They have identified and evaluated organizations that have the greatest impact.


Here’s a display of how it all shakes out for us in 2018. It took time to sort our donations so I can see the percentages. I need to do this every so often to make sure our giving follows our priorities. I like the ~90% for the top two categories, but I’m not sure that 57% toward our number one priority is enough. We’ll work though this for next year.




Conclusion: If you are like Patti and me, you didn’t spend all your Safe Spending Amount for 2018. You had some left over. Patti and I will always gift what we don’t spend. We don’t plan to throw any unspent back into our investment pool. I try to think about our donations “strategically.” Reducing suffering is a top priority for us. I’m refining how much to give and to whom we should give.

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