How to Give Back in Hard Times
by karls | October 29, 2008
Times are tough, we all know this. There is an obvious incentive to save every penny that you can. It is easy to concentrate on your family and friends and their survival. It is easy to forget that there are others struggling as well. Charities, when the economy is doing poorly, tend to suffer even more than the average person. Compounded with more people needing charity during hard times, this can cause a lot of struggle for me people.
Life insurance can be part of a solution to helping charities in these times. For people who want to give to charity, but cannot afford the loss of money, can cash out life insurance policies or donate the whole policy to a charity. The cash value can be used by these organization to aid more people than they currently are able to.
Another possibility is to change the recipient of your life insurance policy to a charitable organization. If you are confident in your finances and perhaps have excess life insurance, then you can donate that money to a charitable organization, just like willing money to charity.
These actions can have the same tax benefits that donation in general has. If you are looking for tax relief, then donating a life insurance policy can have the same benefits.
It’s lovely to want to help out charities, but the sad fact is this is a recession (if not a depression) and I need every cent I can get, both for myself and my family. I couldn’t imagine donating my life insurance policy to a charity and leaving my family paying my debts and burial fees, and there is no way you could get me to spend my hard-earned money on charities during these times. Before you know it, we’ll ALL need charity with this economy. And who will be donating money to us then?
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Thanks for this, Efinancial. I’ve been wondering if there was a good way to give to charity given the current financial crisis. It’s not easy, but any good Christian knows that these times are the ones in which we are tested most and hard economic times do not excuse one from helping out his fellow man. You should still give what you can out of your personal savings, but the ideas in this post are a great way to continue to contribute to saving people from poverty. “It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” — Mark 10:25
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These times are hard, but its harder for some than it is for others. There are people who have to endure the same trials and tribulations, which we are going through now, every day of their lives. This is a great way to give back money that I wouldn\’t have anyway. Sure, I don\’t have as much money as I used to, but even I still live a fairly cozy life, even if I have to cut back. What we shouldn\’t be cutting back on is our donations to orphanages, soup kitchens, and oxfam. These are the truly needy causes whereas most of us are not
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I must say, I am deeply thankful that you posted this. I work at a charitable organization and times have been very tough for us all. Over the past 3 months we’ve seen a massive drop in donations and some of our employees have had to take pay cuts just to keep things afloat. Remember, when you donate money it’s not just going to the poor, it’s going to those who dedicate their lives to helping those in need and who themselves would like to be able to go home every night to a hot meal. I don’t mean to panhandle for myself or my colleagues, but please do remember that your money not only goes to the beneficiaries of these organizations, but also helps to keep the organizations afloat, especially the smaller ones like the one I work for.
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To piggy back on what Henry Jones said, you should all give to smaller charities if for nothing else because the larger ones mismanage their money. The American Cancer Society for example pays its executives millions of dollars and it seems like there’s a new corruption scandal coming out of there every other week. Half the big charity companies are just profit-driven machines, so be careful and do your research before you give your money to one of those companies. I’ll stick with my local charities and shelters.
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I think that this is an interesting idea, and should be considered. I am all for donating to charity, and it is sad that they are the first ones hit in an economic crisis, but I need my life insurance. Especially in these hard times, I need to know that my family is protected should anything happen to me. I would rather give a little money away now, than forfit my entire insurance policy, especially when I have been paying into it for so long. It is very cool that this has been made tax deductible. Does anyone know how long it has been that way?
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I wish that people had thought of this when I was working for a charity a few years ago. It sounds like a great way for people to continually give back, without paying too high a price. We used to live or die with the rest of the economy. Even if things got a little worse on the market, we saw our donations plummet. If people knew that they could do this, perhaps we would have been able to ride out the hard times.
I would also like to make a direct appeal. I know that it is hard, and that times are uncertain, but please give what you can: money, time, anything. Those who are less fortunate will truly appreciate your generosity.
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Typical investors, trying to find a way to make your charitable contributions tax deductible write-offs. When you give to charity, it should be about doing it out of the kindness of your heart, not because you can stick it on your tax forms and skim a little extra from the government. Remember that the government only has a limited supply of money too, so it’s not like that tax write-off just disappears (if anything, it contributes to you having to pay higher taxes next year because the government is making less). With that in mind, donate not only with your checkbook, but also with your heart. You’ll feel a lot better when you give money to charity and don’t put it on your tax forms. It’ll feel like you’ve done something worthwhile for humanity and not just for yourself.
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This actually is a fairly common occurrence with universities. Lots of wealthy alumnae donate large portions of their estates and (although I\’ve never seen the specifics of their donations) I assume that there is some donation of life insurance money if they think they can afford it. This is something that many people should probably consider especially if they do not have high premiums. I imagine a decent life insurance policy could be a pretty sizable donation to a charity and these organizations are really struggling right now.
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The best part of this proposal is the tax benefits of it. If you are looking for a tax shelter, but are strapped for cash so you cannot make donations from your current income, then selling a life insurance policy makes a great way to effectively keep all the money that you had and need for the time being while being able to potentially lower your tax bracket. If you are having trouble now but expect to be able to re buy insurance when the market recovers, then this seems to be the policy for you
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Isn’t cashing out a life insurance policy sort of selfish? I mean, I don’t buy life insurance for myself, I buy it for my family so that they’ll be secure when I pass on. In this sense, I don’t really feel like it’s my money to cash out. I have a responsibility to my loved ones, and while it’s nice to help out charities, these are the people closest to me and I don’t want to let them down. I will still give to charity, but it’ll be money out of my own pocket, thank you very much.
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I’ll be honest, i think if you are going to cash out your insurance policy, there are a lot smarter ways of using it than giving it to a charity. Especially if it’s an old policy, it is probably worth quite a bit of money. If you use that to invest in the market (which makes sense considering how cheap stocks are right now) you can actually contribute to some economic recovery which will help the economy as a whole. While you can probably make a bigger individual contribution by donating money to charity, if everyone made small steps that restored confidence in the economy, then we may get out of this faster. The potential for a tax shelter may be helpful, but im unclear whether or not the small tax benefit outweighs all of the money
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Adam, it may be true that you can help the economy by reinvesting your money in stocks, but that’s something people should be doing anyway. I think it’s a bit callous to take your money and put it in a huge economic pool where it may never trickle down to the truly impoverished, rather than giving it directly to them so that they can have food to eat and clothes to wear. Maybe we’ll get out of this crisis in a few years or months, but millions of people across the country need food TONIGHT, as do their children. Who are you to say that they don’t deserve this? It’s about basic human rights, not economics.
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Charity can be done on a small scale, too. If you see a homeless guy on your way to or from work today, buy him a sandwich or toss him a few dollars (I would recommend the sandwich because, bad as this sounds, it’s hard to buy booze with a sandwich). Go down and volunteer at your local soup kitchen– this won’t hurt your wallet and you’ll get the same great feeling from your actions as you would by donating large sums of money. Helping in little ways is a great way to truly impact people’s lives and help out your community without breaking the bank during a recession.
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I use a charity that helps stop foreclosure and evictions, and helps to place families that are living in shelters and streets new residences. If yall can even afford to donate time or even just a $1, I think you would find it rewarding in the end. Life is full of karma and I think the reason our economy is going so bad is we have all become selfish and afraid to give anything of our own to help those who surround us on a daily basis, and our now suffering from the consiquencies of our actions. So I say everybody can afford to do something, but most can’t afford to do much, but if everyone does something, then many could be helped. If yall would like to try I know they recently opened their web-site http://www.HELPFOROURHUMANITY.COM.
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