Start Late, Finish Rich, page 30
IS THE SECRET TO BECOMING RICH
THE “GOLDEN MAGNET” OF GIVING?
Over the years, I’ve spent a lot of time studying the rich and the superrich (whom I define as people whose net worth exceeds $10 million, not including real estate). The more I’ve learned, the more I’ve become convinced that most people who achieve great wealth have at least one thing in common—giving.
When I first heard the billionaire investor and philanthropist Sir John Templeton make this point, I wondered if it could really be true. (Templeton himself was a famous tither—who started giving to charity on a regular basis long before he became rich.) Could the secret to being rich really be as simple as “give more and more will come back to you”? Does giving away wealth really attract wealth?
Some 10 years later, I can say that I am certain of it. Time and again, I’ve come across examples of superrich individuals who made a point of donating a portion of their earnings to charity—even before they became rich. Indeed, virtually every self-made billionaire I’ve ever studied echoes Templeton in declaring that tithing or giving was a principle of their life well before they had any money.
As a result, I’ve come to believe that the giving of your time or money to help others is more than the “golden rule.” It is the golden magnet. I have seen this happen in my life and in the lives of hundreds of people around me. It’s a simple, observable fact: Those who give lead more abundant lives.
HOW ONE COMPANY DECIDED TO TITHE—
AND BECAME A BILLION-DOLLAR SUCCESS
You recently completed a chapter about how to start your own business. Hopefully, it inspired you to consider doing just that. Well, here’s a great story about one new venture that incorporated tithing in its original business plan—and within four short years achieved a market capitalization of more than $1 billion. Could it be that the idea of donating a portion of its income helped to jump-start this company’s success?
The company is called Salesforce.com. It was founded by a very successful visionary named Marc Benioff. While I don’t know Marc personally, one of my best friends from college is married to his sister. On the golf course a few years back, my friend told me how his brother-in-law was in the process of creating a new company that could make traditional contact-management software obsolete by putting the contact-management system online (so no software or network would be required). As my friend shared with me what this new company was trying to do, it seemed clear Benioff was onto something that could transform the way business is done in the twenty-first century. But equally impressive, as Benioff toiled away building his company, he did something I’d never seen done before—he committed 1% of Salesforce.com’s equity to a foundation that would give back to help others. He also committed 1% of the company’s profits (in product donations) and 1% of his employees’ time to help others. He then went around giving interviews and speeches, pointing out that if more corporations both in the United States and abroad were willing to set aside a percentage of their stock, profits, and time to helping others, the world would quickly become a better place. Benioff called this “Compassionate Capitalism,” and he wrote a book on the subject, using the phrase as his title.
WHAT IF EVERY COMPANY
IN THE WORLD GAVE BACK?
What a great idea! What if every company gave back to the world a small percentage of its stock and profits and time? It wouldn’t have to be a lot. In fact, it could be a tiny percentage, like Benioff’s 1%. But cumulatively and over time, the impact would be huge—especially if everyone started doing it. Imagine if Wal-Mart or Microsoft had tithed just 1% of their equity from day one.
In June 2004, just four years after Benioff started Salesforce.com in a small office, he was able to take the company public. Overnight, his net worth swelled to an estimated $250 million, as the market valued Salesforce.com at roughly $1 billion. On that basis, the endowment of the charitable foundation Benioff established was suddenly worth some $10 million. But even before that happened, the foundation was supporting charitable programs in 13 countries that positively impact 50,000 families. Equally important, 85% of Salesforce.com’s employees had already taken advantage of Benioff’s “time giveback program,” volunteering their time to make a difference in their communities. And Salesforce.com was offering its products to nonprofit organizations for free.
My guess is that this is only the beginning for Salesforce.com. Was it a coincidence that this company did so well so quickly? Or did tithing make a difference? There’s no way of knowing for sure, but my gut tells me that Benioff’s decision to tithe his company’s equity certainly didn’t hurt. Indeed, it had to have helped. Companies go public every day. One of the things that made this one stand out is that it was built to give back.
See how giving can change your life and help others at the same time? With this in mind, let’s take a close look at how to manage your giving.
DECIDE ON A PERCENTAGE AND
MAKE IT AUTOMATIC
For starters, you can decide today that you’re going to send a percentage of your income back out to help others. What percentage? That’s up to you.
Many people suggest the traditional tithing route in which you take 10% of your gross income even before you pay yourself first and donate it to helping. Then you make your contributions to savings. In effect, you’re deciding to pay yourself second.
I’m not so sure about this practice. My experience is that it turns many people off from giving anything. I say you decide. One alternative is to continue to pay yourself first—but at the same time commit to giving a percentage (even if it’s only 1%) to help others.
The best way I know of to do this is to make the process automatic by arranging to have a percentage of your income automatically deducted from your paycheck or checking account and transferred to a reputable charity.
What’s a reputable charity? It’s an organization that doesn’t use up your contribution on administrative expenses but actually spends the vast bulk of the money it collects on the people or causes it’s supposed to be helping. Most experts agree that a charity should pass through at least 70% to 75% of what it raises—meaning its administrative expenses should never exceed 25%.
I personally never give money to any charity until I’ve had a chance to look at its financial records. If you’re going to give money to an organization, you deserve to know how the organization is going to spend it. So ask to see the financials and make a point of finding out what percentage of the money raised actually goes to the people the charity claims to be helping. If a charity won’t show you its records, find one that will.
INTERNET RESOURCES TO
HELP YOU DECIDE WHERE TO GIVE
There is no end to the great resources on the Internet that will help you figure out what groups deserve your support. Here are a few favorites:
www.justgive.org
This is a great place to get started. JustGive is designed to help you identify the charities that are most meaningful to you. At this site, you can find information on more than 850,000 nonprofit groups and get access to complete reports and financial records. You can even funnel donations through the site, and if you register, it can also help you keep track of all your contributions.
www.give.org
This is the web site of the Better Business Bureau Wise Giving Alliance. It collects and distributes information on hundreds of nonprofit organizations that solicit nationally or have national or international program services. The BBB Wise Giving Alliance won’t recommend one charity over another, but it will provide the information you’ll need to make your own informed decision. So before you make any donations, be smart and check out what this site has to say about the organizations you may be considering.
www.guidestar.org
Established in 1994, Guidestar describes itself as an interactive “marketplace of information” for nonprofit organizations, donors, foundations, and businesses. Guidestar provides an incredible amount of information about the operations and finances of nonprofit organizations. Click on the “Donor” link to access Guidestar’s four-step plan to help you make smart choices not only concerning which organizations to support, but also how much you can afford to give.
www.irs.gov
Before you donate money to any organization, you should make sure it is recognized by the IRS as a bona fide tax-exempt charity under section 501(c)(3) of the Tax Code. To do this, visit the IRS web site, click on “Publications,” and scroll to Publication #526, “Charitable Contributions,” in the drop-down menu. This booklet, which you can access immediately online, covers everything you need to know about charitable giving and how you should document donations for tax purposes. You can also call the IRS toll-free at (800) 829-3676 to have a copy mailed or faxed to you, or to ask any additional questions.
GIVING BACK A PERCENTAGE OF YOUR TIME
People ask me, “What about giving my time to charities? Does donating my time count?”
Of course it does. In fact, donating your time can often be more useful than donating your money. There are tons of charities that need helping hands far more desperately than they need additional dollars.
And from your point of view, donating your time can be incredibly meaningful. I’ve given both money and time to charities—and though both count and both help, the experience of giving my time has had far more impact on my life than the experience of writing checks.
YOU CAN ALSO CHOOSE TO GET
REALLY INVOLVED
You can give a little of your time or you can give a lot.
I’ve never seen a charitable organization that wasn’t looking for enthusiastic volunteers. All too often, people assume that to be really involved with an organization you need to be rich and powerful. This is simply not true.
Take the story of Marissa. She came up to me after I delivered a speech on giving and confessed that her dream was to be on the board of a major charity in her city. Unfortunately, she added, she was sure the organization wouldn’t want her because she wasn’t rich. As she put it, “I can’t buy my way onto the board.”
This prompted me to ask Marissa a really simple question: “Have you tried to volunteer your services to the organization?”
Marissa said she hadn’t.
“Then don’t assume anything,” I replied. As I told her, my experience is that while charitable organizations are always looking for money and connections, they are equally interested in enthusiasm. And you can often make up with enthusiasm and dedication what you can’t offer with money or connections.
Marissa said she’d give it try. A year later, I received an e-mail from her. She was now chairwoman of the charity’s big annual fund-raising event. “You wouldn’t believe how much time this has taken up of my life,” she wrote me, “but I’ve never been happier. I’ve met so many incredible people. I have even gotten a new job as a result of someone I met through the organization. But while it’s been unbelievable for networking, the most important thing is that I feel like my life has more significance. I just feel better as a person.”
SOMETIMES GETTING INVOLVED CAN
COMPLETELY CHANGE YOUR LIFE
When he was a boy, Darren Port’s best friend had diabetes, so in 1993 Darren decided to sign up for a “walkathon” sponsored by the New York chapter of the Juvenile Diabetes Foundation. This led Darren to get involved in the organization. Before long, Darren’s youth and enthusiasm were attracting attention, and he was being tapped to do more. Soon, people twice his age were looking to him for leadership. By 1996, he was named chairman of the Walkathon.
As a result, Darren started to become well known in New York philanthropic and business circles. As he told me recently, “The people I’ve met in the last 10 years as a result of donating my time to charity have not only become close friends, they’ve also led to amazing business relationships. I’ve got a Rolodex filled with the names of some of the most important people in the city. Because they appreciate what I’ve done, I know I can count on their help if I ever need something.”
Then Darren said something to me that is really important to know:
“Charities are driven by the people who get involved!”
As a result of his work with the Juvenile Diabetes Foundation, Darren has found his passion and his purpose. He recently founded a new company, called PoweredbyProfessionals.com, that is transforming how charities raise money. In just a year, he’s helped worthy groups raise more than $3 million.
ARE YOU READY TO GET INVOLVED?
Here are some great web sites of organizations that can help you get started volunteering your time to help others.
www.networkforgood.org
Network for Good is an “e-philanthropy” site that lists worthy organizations to which you may want to donate your money or time. It also provides information about how to get involved with issues you care about. The site’s goal is to connect people to charities—or, as the group puts it, it’s dedicated “to using the virtual world to deliver real resources to nonprofits and communities.”
www.volunteermatch.org
VolunteerMatch is a nonprofit online service that will match your individual interests, location, and schedule with community-service opportunities in your area. It has already generated hundreds of thousands of volunteer referrals nationwide.
www.volunteersolutions.org
Volunteer Solutions is another matching service that helps connect individuals to volunteer opportunities in their communities. You can search for opportunities based on your interests, skills, and location, or simply by entering a keyword. You can also register to receive e-mails that list volunteer opportunities that match your specific profile.
www.idealist.org
This is the web site for Action Without Borders, a service dedicated to connecting people, organizations, and resources to “help build a world where all people can live free and dignified lives.” The site will enable you to search more than 40,000 nonprofit and community organizations in 165 countries, along with thousands of volunteer opportunities in your area and abroad.
www.charities.org
America’s Charities is a nonprofit federation of both national and local charities. Its member charities receive donations through workplace-giving campaigns. Visit this site to find out how your company can sponsor a workplace-giving campaign for employees.
www.nationalservice.org
The Corporation for National and Community Service provides opportunities for Americans of all ages and backgrounds to serve their communities and country through three programs: Senior Corps (age 55 and older), AmeriCorps (age 17 and older), and Learn and Serve America (for students). You can access any of these three organizations through this one site.
www.nvoad.org
The National Voluntary Organizations Active in Disaster (NVOAD) coordinates planning efforts by many voluntary organizations that are involved in responding to disasters. Click on the “Members” link at their web site to get a list of the many fine groups that participate. The list consists of links to each member’s web site, where you can learn more about them and how you can help.
www.mentoring.org
The National Mentoring Partnership is an advocate for mentoring and a resource for mentors and mentoring initiatives nationwide. Its web site allows you to explore available mentoring opportunities as well as to sign up for online training to become a better mentor.
www.campfire.org
Camp Fire USA is a not-for-profit youth development organization that currently serves some 735,000 children annually. Its mission is to build caring, confident youth and future leaders. Visit its site to find out how you can volunteer your time or make a donation.
www.savethechildren.org
Founded in 1932, Save the Children is a nonprofit child-assistance organization that strives to make lasting positive change in the lives of children in need. It operates in 17 states and more than 40 countries throughout the developing world to help improve the health, education, and economic opportunities of children and their families. In addition to allowing you to make online donations, the web site also offers many other ways for you to get involved in Save the Children’s mission.
www.ymca.net
With more than 2,500 branches, the YMCA is the nation’s largest not-for-profit community service organization, working to meet the health and social service needs of nearly 19 million men, women, and children in 10,000 communities throughout the United States. Y’s are for people of all faiths, races, abilities, ages, and incomes. The YMCA web site offers ways to get involved either as a volunteer or as a donor.
www.americaspromise.org
America’s Promise—the Alliance for Youth is a collaborative network that strives to fulfill what it calls the “Five Promises” for every young person in America: Caring Adults, Safe Places, Healthy Start, Marketable Skills, and Opportunities to Serve. This site offers many ways to donate your time and resources and to make a difference in the life of a child.
www.score.org
SCORE, which describes itself as “Counselors to America’s Small Business,” is a nonprofit association that provides entrepreneurs with free, confidential business counseling. Advice and workshops are offered at 389 chapter offices nationwide by volunteers who are experienced entrepreneurs and/or corporate managers and executives. If you want to share your business expertise and give back to your community, you might consider volunteering your services to SCORE or donating funds to the SCORE Foundation. This web site explains how you can do either.
www.standupforkids.org
Stand Up For Kids is a national volunteer organization committed to the rescue of homeless and at-risk youth. Run almost entirely by volunteers, it provides food, clothing, shelter, help in finding housing, education assistance, vocational development, counseling, health services, transportation to self-help meetings, and legal assistance. Volunteers also conduct life-skills training, such as budgeting, banking, apartment cleanliness and safety, shopping and cooking, nutrition, and hygiene. The web site offers many ways to get involved.
