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Charitable giving

Charitable giving is the act of donating money, goods, or time to help people in need or support causes you care about. It is good because it makes a positive impact on the lives of others and helps create a better, more compassionate world. Created by Sal Khan.

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Video transcript

- So let's talk a little bit about charitable giving. And this one is close to my heart because I run a nonprofit. So why do folks donate to charity? Well, you might have your own motivations. For most folks, I think it just feels good. They might feel that they have certain privileges in life that other folks don't have or they might want to see a disease cured. Help educate folks, help the world in some way. And if you haven't tried it, I encourage you to when you donate money or you donate some of your time services or you donate goods to a charity and you feel like, hey, I'm making the world a little bit better, it feels really good. Now, some people might be a little cynical and say, oh well they get a tax write off whenever they donate money, et cetera. But I wanna be very clear, 'cause I've heard that a lot. Whenever someone has seen someone else donate, oh, well they're just getting a tax write off. In the vast majority of cases you do not get more money back than you donate. In most, most cases, if you say donate a hundred dollars that's just going to reduce your income by a hundred dollars. And let's say your marginal tax rate is 30% to make the math easy, that means it'll reduce your taxes by 30% of that a hundred dollars. So if you donate a hundred dollars to a not-for-profit to a charity, you will get $30 back in that situation on your taxes but you still donated a net $70. So when folks are donating, don't be cynical about it. They're definitely giving more than they're receiving. There's some special cases, maybe you have a car that you couldn't sell for more than a few hundred dollars. And if you donate to a charity you might be able to have a slightly larger write off than that. But in the great majority of cases folks are giving more than they're receiving. And what they're really receiving is that feeling that they're doing good for the world.