Charitable Giving and Teaching Kids About Money

At the end of each year, we give money way. Even though I’m trying to pound cash into investments, I think it’s important for a few reasons:

  • It’s good to help people.
  • It’s good karma.
  • It’s tax deductible.

Beside that, it presents a good opportunity to teach my kids both about other people in the world and about money.

This is something we have that others don’t.

Our system is this – I sit down with the kids and we review a list of nonprofits. (my wife and I divide our contributions in half – she gives her half away in a different way.) The kids and I look at groups in four buckets: international; domestic anti-poverty groups; the arts; and political/advocacy.

We talk about each of them and about why we’d give money. This year, we watched Peter Singer’s Ted Talk about effective altruism. We go on the nonprofit’s webpages and watch whatever videos they have. We talk about how important it is to think about what problems we think are most pressing, and what the best way to solve them is. And we try to look at data on what’s worked in the past for the nonprofits we’re considering.

Though, at the same time, I recognize that there is likely not a morally relevant difference between, say, a homeless person located a three miles from me and a homeless person thousands of miles away, and that the same money that helps the guy three miles away could help dozens of people thousands of miles away. Nonetheless, I feel the pull of giving some money locally.

This year, the list was basically:


  • Deworm the World
  • Against Malaria
  • GiveDirectly (I find their stuff particularly interesting, for the reasons set out here)
  • Dispensers for Safe Water


  • Our local Pathways to Housing
  • Our local food bank


  •  a local orchestral music program for low income kids


  • Planned Parenthood
  • National Resources Defense Council
  • ACLU

We then gave each of us three votes at different dollar amounts so that my vote counted the same as each of the kids (e.g., 3 votes each worth $1,000; 3 votes each worth $500; 3 votes each worth $100). Then we voted and allocated based on the votes.

What impressed me was how much the kids got into the nitty gritty of what caused the most impact. Some of the money we gave away, again, isn’t optimal on the Singer scale. The lack of access to orchestral music by low income kids in a major metropolitan area is a shame, but not quite of the same scale as a lack of safe drinking water for kids in the developing world.

But I think that’s life. What I’d like the kids to learn from this – and I think they did – is that they need to think rationally about money and how it’s used most effectively. It’s a lesson that’s easier to teach with giving money to others than it is with their own money.

As a bit of parenting, I think this succeeds. And the kids feel invested in it. We’ll check in on what the nonprofits are doing as the year goes on, just to stay on top of it.

This may not be optimal as a way to avoid taxes though. I really like the idea of setting up a charitable investment account, as described by Physician on FIRE. And there’s good reason to think that giving money later rather than now may be better.

As a separate process in 2017 I’ll likely set up a charitable investment account so that, around bonus time, I can transfer some of my appreciated mutual funds into the account and replace them with bonus income (or, at least, do that to a certain level – that’s cash that’s not available to invest to meet the financial goals I’ve set out).

But, even though I’m sure I’m making a ton of mistakes as a parent on a near hourly basis, this system feels like it’s working.

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