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POSTED BY ON November 30, 2010 6:07 pm COMMENTS (3)
Wanted to know your views on Charity & Financial planing .Is / can Charity part of Financial planing ?People ( not considering corporate , big business man etc ) do get some tax rebates by donating but do they seriously pursue Charity as a part of their financial goal , not for the purpose of tax rebates but as a responsibility towards society .And if there is way or method to create awareness about this ( which i am sure should come from within ) so that we can add this to our financial plan.
Sorry i do not know if this question qualifies to be on this Forum ,but just out of curiosity i am putting it here for your views.
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Hi Prakash
Sharing with those who are underprivileged can really bring smiles to some faces. I personally feel that you should set aside a certain sum of your total income income for the purpose of donation. But make sure the donation reaches the needy. Wrt donations and charity being used as a tool of financial planning, benefits of Deductions available under section 80G and 35 of the income tax act can also be availed
Any question on money related issue qualifies here 🙂 .
In my experience, I have not seen any person who has put any goal on charity , but it can be one of the valid goals !
Manish
Prakash,
I like your querry and also appreciate your serious/concerned attitude towards charity. In my opinion it is a very much valid aim for financial planning. We specifically ask a client whether he/she has any particular commitments towards charity; today or sometime in future or even after retirement. Many a times a client is surprised with such a querry coming from the planner because they never thought that the person who has come to them for so called managing money or ‘growing money'( though financial planning is much more than just growing money) will be asking about ‘reducing money’!
There have been many pleasant experiences after we have posed this question. They also start realising the financial planning in a broader sense or the true sense. Many of us have a notion that money working hard means higher returns. No, that is not the case. Money is working hard when it is doing all those functions which it is supposed to do in an effective way/manner. And if someone has charity as a part of goals of life, then donating money for that purpose should also be considered as money working hard.
In our country there are many communities who believe in setting aside money , some percentage of their earning for charities as part of religious belief or tradition. But conscious charity or philanthrophy is not so prevalent as it is in the Western countries. I have read somewhere that if value of the charity done by US citizens either in cash or kind and also spending personal time for such projects is calculated then it is in hundreds of billion dollars. The figures were simply amazing when calculated as per capita contribution and as a percentage of GDP also. Comparative data of estimated charity being collected in India were also given. No surprises, those were pretty poor figures on per capita basis and as a percentage of GDP also. The author was indicating how much is the ‘untapped’ potential and what possibly can be done with this kind of money. They had calculated the amounts from the middle classes and above economic category only.
There are many individuals who if made aware of such facts would be interested in the giving. But two questions are always there : Whom to give and whether my money would be really put to good use? Nowadays portals like GiveIndia (www.giveindia.org) are addressing all such issues in a very fine way. They have a list/database of many unknown NGOs/Institutions/Individuals who are doing some great work in so many various areas one can imagine. You get zapped when you just realise what kind of pains some individuals are taking for the betterment of society when most of us are just focussed on personal wealth growth. The funny part is, most of us are going to create much more wealth than we need for fulfillment of all of our goals, dreams. Yes, that is true. Many of us think that we need to do look after money because we may have ‘scarcity’ of financial resources to achieve our goals in life whereas actually it is the problem of ‘plenty’! (I can prove that with calculations and all that!).
One of my close friend is associated with many NGOs, is a committed social activist. We were just discussing such issue of individuals/organisations who may be doing good work but are not in limelight. He told me about a talk of Dr. Abhay Bang( Founder of ‘Search’-working for health and social upliftment of tribals in Vidarbha-Maharashtra, Magasaysay winner and many other awards). He said as we are a well known institution now, more funds come to us than we can possibly put to use, whereas other lesser known organisations who may be doing committed work don’t get enough funds. (Brand, marketing, the pull effect work here also!) . In Pune, a husband and wife team, who were associated with media field realized this fact. They started holding an exhibition of such lesser known organizations/NGOs. They provide good stalls and create good ambience just like a consumer goods or such kind of exhibitions/sales have. Invite a good cross section of such NGOs and hold the event without any charges to NGOs. Very good public support and participation of visitors is there for it. So even the ‘intermidiaries’ like this couple or giveindia and other organizations are also doing great/important work.
financial planners also can play the role of such intermidiaries or the role of a decision influencer very effectively. Much better than anyone else as the clients believe in our advice on financial matters. Similarly jagoinvestor, a platform- whose opinions/articles are influencing many many individuals today, can bring the charity as aim of financial planning in limelight. At least no harm in having an article on it from Manish !!!
shashank