Episode 121: Charities and Money Matters

DAD: Welcome back to Money with Mak &G, don’t forget to LIKE, SUBSCRIBE and COMMENT on the podcast, this is for the week ending 07/23/21.  We’re glad you’re here and so let’s jump into M&M.

MAK: Yes, this is Mak and these are the markets….. ABSOLUTELY CRAZY week.  ANOTHER high level in the Dow, S&P as well as the NASDAQ.

GRANT: The Dow finally got ended the week ABOVE 35,000.  So, the big companies are doing well.  The S&P is showing us that many think the economy is doing well, and the NASDAQ is still going strong.  Tech, tech, and more tech.

MAK: Even though Bitcoin jumped almost 10% last week, Apple moved into double digits for the year.  Yeah, baby!!!

GRANT: It’s always tempting to believe the markets will continue to rise, but it’s not time to get overconfident.  If you have your plan, stick to it. It might get a little bumpy.

MAK: Good point G.  You mentioned you’ve got a couple of things on your mind. What’s up?

GRANT: I’ve been thinking a lot about helping people out because of all the bad stuff that has and is happening with COVID.  We’re seeing a jump in cases.  I know we’ve heard about how things have really affected a lot of people.  Many are stressed. Others have lost their jobs or lost friends and family. And, many are struggling, both financially and mentally.

MAK: It’s weird to think about it because so much has changed.  Even for us.  We’ve had to get used to wearing masks, not wearing masks, vaccinations, online learning, in-person learning, being confined, and more.  It hasn’t always been the easiest.  But, helping others is something I think we’d all like to make part of the way we live our lives.

GRANT: I agree.  Giving back can make you feel better about your own situation while helping others.  Oftentimes, you hear that giving is the most difficult when LIFE is tough.  I know that helping others should be a part of our budget and our life because it’s important.  

MAK: Agree it can definitely be money but it doesn’t always have to be. Giving of your time is great too. I did a bit of research and found some interesting stuff. 

GRANT: Me too.  I found a survey of people who are giving money away from their donor-advised fund.  About half say they will continue to give the same amount as prior to COVID. While a quarter will increase their giving due to the additional hardships The last quarter will decrease it.  Sounds like many people understand that giving, especially during COVID requires maintaining or increasing your giving.

MAK: Wait, you just mentioned a “donor-advised fund”? Is that where you put money into an account and invest it, so it can grow? You can then give away even more money, right?  I remember dad said that when you make your donation into the account, you get a tax deduction but you can never take it back out.

GRANT: That’s right.  It kind of acts like an investment account that is locked.  You put the money in and let it grow, hopefully. You can then send money to a recognized charity. Anybody can start one.  There are different requirements for your initial and additional deposits as well as the minimum amount you can send to the charity of your choice.

MAK: Interesting.  I saw that Schwab can hold your donor-advised fund.  There is NO minimum deposit, NO requirement for additional deposits, and any donation made from your account to a charity starts at ONLY $50.  That’s one of the most flexible donor-advised funds out there. Even grandma has one. She put in an amount to cover several years of her church donations. With all the growth, she could actually get an extra year or so “free” because of the growth. 

GRANT:  That’s cool. We both know the fund dad started has more money now than when he started it.  AND, he’s given away OVER $31,000.  Isn’t that crazy? Helping others, and just being smart about it is powerful. I know it’s one of his favorite things.

MAK: Agree.  I read some interesting info from the US Bureau of Labor statistics.  It said that those with the LEAST income give the MOST. They’re actually more charitable.  Isn’t that a little hard to believe?  It showed Americans in the bottom 20% financially actually gave 4.3% of their income which is twice the average of 2.1%.  

GRANT: Ok, that means it wasn’t TOTAL dollars given, but the percentage of their income that was given.  Wow. Give till it hurts.  Didn’t it also say that about 2 out of every 3 households actually donate to charity? That’s great news that most people give. Many give to their religion. Christians try to give 10% of their earnings to their church or charities. It’s called “Tithing”.

MAK: In the Jewish faith it’s called “Tzedaka”, and they also look to give 10 percent of their earnings to charity too. Of the billions of dollars donated by Americans, religious giving is less than one-third of the total giving. There’s still a lot of other giving going on.  We do know that we should always pay our “necessary” bills first while finding ways to save and possibly give more.

GRANT: So, I have to pay for my video games first then, right?

MAK: Did you really just ask me that? I’m just going to ignore that question, and tell you video games are NOT a necessary expense.  End of discussion. Setting up your budget to include donating money to charity is part of getting your financial house in order. You can start small. No worries. But, before you choose a charity, it’s so important to “DO THE WORK”.

GRANT: What does that mean….”Do the work”?

MAK: I’ve got a question for you.  Would you like to give your money to a charity that does a terrible job managing its money?  

GRANT: Absolutely not.  We’re all about being responsible with our money on this show. So, I expect the same from any charity that I give money to. I want them to cherish the money I give and make it go even further, kind of like a donor-advised fund.

MAK: Exactly.  Nobody wants a charity to waste money which means the money never makes it where it’s supposed to. Have you ever heard of GuideStar?

GRANT: Did you just say “North Star”?

MAK:  No, it’s called “GUIDEStar”.  It can help guide your choice of a charity, just like the North Star can guide you. They have information given to the IRS on a form called a 990.  Remember, the IRS. That’s the internal revenue service. They collect taxes. This is an “official” document. It has to be accurate and truthful, or the charity can get in a lot of trouble.

GRANT: I bet it would be really hard for a charity to get donations from people if they’re caught lying to the IRS. If you lose trust in a charity, I could see that being REALLY bad.

MAK: Yep, it would do a lot of harm.  GuideStar shows you information on how big the charity is, where they focus their efforts, financial information, and more.  There’s another organization called Charity Navigator which gives a rating for many charities.  It’s kind of like a grade.

GRANT: That’d be really helpful if you want to know how well they’re managing their money and if they share important stuff on how they make decisions.  I like seeing more of every dollar donated going to their programs like helping animals or people.  I saw one that uses only 40 cents in helping veterans while another one was using almost 94 cents of every dollar toward helping individuals better their skills to get a job. Do you know why there’s a difference?

MAK:  I think of it as managing a personal budget.  Sometimes we just don’t watch all the expenses.  Sometimes, we buy things we don’t need or it doesn’t fit into the budget.  I also read that sometimes the leaders take big salaries too.

GRANT: That is true. If I donate money, it’s worth taking a look at how the charity is run. I want my money to go as far as possible. It’s the same for my personal money decisions.  It’s about making good choices. I think we should all take a look at these rating systems prior to giving our hard-earned money.

MAK: Agree. I was looking around, and I found a unique charity that YOU would love. It’s called…Child’s Play. Do you have any idea what it’s for?

GRANT: Is it for little kids, and the charity gives board games or toys?

MAK: You got the toys right, but they also give a lot of video games and video game equipment to pediatric hospitals so kids can play with them to take their minds off things.  The hospital can ask for something that you can buy directly. Or a gamer, that’s you, can just donate money.  They’ve raised over $150 MILLION since it started in 2003.

GRANT: Awesome!! I’ll definitely have to check that one out.  Have you ever heard of Monkey Helpers?  That was a new one for me.  What do you think they do?

MAK: Wild guess.  Someone dresses up as a monkey and helps people out?

GRANT: Not really… It’s a “service” monkey.  You know, they help people with spinal cord issues or those who can’t move well. They can help to retrieve dropped or out-of-reach items, helping with a drink of water, turning a page, scratching itches, pushing buttons on a remote, and other stuff. It’s a SERIOUSLY trained monkey.  Ok, before you say it’s wacky, there was a guy in 2017 who had a “service” squirrel.  He was going to get kicked out of his apartment for having the squirrel, named Brutis, for emotional support.  

MAK: That’s a new one by me for sure, but Grandpa Jones had a pet squirrel for a while.  He always said he was smart. Here’s one for you….What about “Longhope’s Donkey Shelter”.  I bet you can guess what they do….

GRANT:  Isn’t that the charity that accepts donkeys from owners who can’t take care of their donkeys anymore?  I would have never thought that was a real thing. Do you remember Peanuts with Lucy and Charlie Brown?  There’s a charity called Project Linus, after the kid in Peanuts that never went anywhere without his blue blanket?

MAK: Absolutely, I remember Linus.  Project Linus provides “love, a sense of security, warmth and comfort to children who are seriously ill, traumatized or otherwise in need through the gifts of a new handmade blanket”.  How cool, and the volunteers, who make these gifts are called “BLANKETEERS” and for 20 years have donated about 350 blankets a MONTH all over the country.  That’s probably over 100,000 blankets by now.

GRANT: AMAZING!!!  Dad always loved great grandma’s blankets.  You know, there are so many great charities, and by using some of the online platforms you can search for the one that meets your goals from education, to health, animals, kids, and many more, while figuring out how well they manage the money you give them.

MAK: You got that right.  So, don’t forget to do a little work before choosing your charity. Thanks for being here, and we’ll see you next time for more money with Mak&G.

DAD/GRANT/MAK:  Bye!!!