It is time to test our economic knowledge with one easy question. Does giving money charitably to others make us less wealthy based on the fact that we are giving money away? If you answered yes, you are very wrong and I will explain why.
Recently, in an academic study, several entrepreneurs shared that one of their secrets to success is how much they give away to others. In fact, most indicated that one must give before they even have in order to succeed. One economist who participated in this study thought this idea was clearly a farce and decided to do further research to prove them wrong. His theory was that giving charitably results in zero return on investment and has no positive economic impact for the giver.
Discovering a study conducted by Harvard in 2000, this economist quickly found that when people give charitably, they actually get richer. In fact, during his own research and study, he discovered that the return on investment for each dollar given to charity is roughly $3.75. How can this be?!
In order to find the answers, this economist had to turn to psychology for answers. Studies have proven that giving charitably makes us happier and more productive. In fact giving is a reciprocal recycle of joy where happier people give more and people who give more are happier. Likewise, it has been proven that giving literally changes our brain and can give us a “helper high” which instantly reduces stress. Lowering stress helps us to be more focused, healthy, and productive. Thus, giving to others helps us remain “in the zone” meaning it allows us to maximize our abilities for longer periods of time—helping us reach our full potential and be most effective.
Studies have also found that giving changes the brains of others. When people notice others freely giving, they instantly perceive this individual as a leader and are more willing to follow. Thus, when we give charitably, we become more effective leaders because we can have greater influence over others. Again in studies, people have listed charitable giving as an important leadership trait.
Still, knowing this is not all. It has also been proven that influencing and helping others to give will multiply the positive effects of giving. As we help others give, we become even happier and increase our own ability to be productive and effective.
This study and research ties into the “Abundance Mentality” found in many business books which essentially means we should have the mind frame that there is plenty to go around for everyone. Thus, helping others does not in any way diminish us but can only bring us up. Unlike the traditional “I win you lose mentality,” this belief is that the more we help each other, the more we all succeed. This study and research helps prove this point.
Finally, this study concludes that part of our secret to success as a nation, as communities, and as individuals is our willingness to give charitably. So remember, giving does not equal less but in fact equals more. Giving charitably is a secret to leadership and success!
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