Giving Compass' Take:

• The author explains the impact charitable giving can have on your life and outlines strategies to consider.

• How can other avenues of giving such as impact investing and donor-advised funds help individuals give more strategically?

• Read the full Giving USA 2018 report that shows how giving grew to more than $400 billion. 

It’s easy to think charitable giving is just for billionaires. After all, we study and work in buildings named after rich philanthropists, peek at the sponsor lists at our favorite museums, and read headlines about Bill Gates, Warren Buffett and others involved in The Giving Pledge.

However, most people don’t realize that by giving -- even small amounts -- you will feel wealthier, healthier and happier. Not to mention the huge impact that a small amount can have on a charity and the world.

It’s important to recognize that many of us have adopted a consumerist mentality that pushes us to always want more. We will rarely ever feel like we have everything we want or that we have enough money. If you keep putting off charitable giving until tomorrow, you might wake up in 10 years and realize you’re still waiting.

Charitable giving has been shown to have a profound impact on the giver. In their book, Happy Money: The Science of Happier Spending (2013), Professors Elizabeth Dunn & Michael Norton found that how people spent money mattered more than how much they spent. In one study, individuals that spent $5 on someone else reported being happier than those that spent up to $20 on themselves. Giving is a gift to the giver. This is backed up by studies showing that giving activates the reward centers in the brain.

When your desire to give is greater than your capacity to give, it is crucial to be very intentional with your choice of where to give.

To ensure continued charitable giving, some individuals like to give a fixed percentage of their income regardless of how much money they earn. That way, giving during your lower earning years also has the benefit of establishing the powerful habit of giving.

Read the full article about charitable giving by Camilo Maldonado at Forbes