Teach a man to fish (The Financial Athlete #141)

Donate as you should invest, with due diligence and the intent of a “return on investment”.

Due Diligence

Investors are cautioned to not throw good money after bad money. Donors should be cautioned with the same advise. A high percentage of the donation for some charities does not help the needy. It is wasted on excessive administrative expenses. A cardinal rule for investing is to never invest without doing proper due diligence. Make this a cardinal rule for your donations, too. Fortunately, it is easy to evaluate online the efficiency of a charity organization through charitynavigator.org.

Return on Investment

How do you donate with a “return on investment”? The answer lies in an old Chinese proverb: “Give a man a fish and you will feed him for a day; teach a man to fish and you will feed him for a lifetime.” To teach a man to fish transitions him from “poverty consciousness” to “prosperity consciousness”. Money alone does not empower, but the combination of knowledge, confidence, and money does.

Ironically, “poverty consciousness” prevails among wealthy families. Being accustomed to hand-outs, the younger generations are ill prepared for self-sufficiency. Consequently, most inherited money is squandered within three generations.

The concept of “return on investment” in giving is to enhance life by increasing productive capacity. In giving to those who are unable help themselves, a compassionate society is enough of a return on investment. Without compassion, society is spiritually impoverished.

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