Hope Heals

I just "met" Karla, a young woman who is making a significant impact on children on the other side of the globe. You can read more about her work at the Grand Valley State University alumni news page, and learn about the nonprofit she hopes to establish at www.hope-heals.org.

Check out her blog on living on a food budget of $1 a day: Hope Heals "Dollar-a-Day Challenge". Rock on, Karla!

Happy New Year!

I didn't do so well on my 2008 New Year's resolution. I guess I have a pretty good excuse. My world got turned upside down in January by a job offer that would very likely have provided extended periods of free time to devote to writing and encouraging philanthropy. The job also required a move to my home town, 300 miles away. And because the salary was less than half of what I currently make, it would have required my wife to find full time employment. Like, NOW.

After weeks of wrestling with the decision, I turned it down. But the seed was planted. Something needed to change; I just wasn't sure exactly what.

Tracy agreed to move toward full time employment and got serious about finding a job well-suited to her talents, experience, and interests. I got serious about developing my writing skills. Tracy started a new job in December, and a number of my articles have been published online or are about to be published in magazines this month. I have a solid outline developed for a book on finding purpose through philanthropy. My 2009 New Year's resolution is to finish the book before I turn 51.

Hmmm...maybe I didn't do so bad on my 2008 resolution after all. As strange as it seems, I do have a better sense of well-being now than on January 27, 2008.

How did you do in 2008?


Copyright © 2009 Richard M. Potter. All Rights Reserved.

My wife, Tracy, and I have posted a guestblog on Roy Moran's blog, Lost In Faith. It you are serious about giving more to causes you care deeply about, I encourage you to read it. This is a proven method of saving money that you can then devote to making the world a better place.

Cash vs Credit Cards, Which is best?

December 21st, 2008

A new weekly feature from several of my friends who live free because they pay attention to the pennies. Their advice is worth the listen!

Will the cash system save money, even if you pay off credit cards every month?

Guestbloggers: Richard & Tracy Potter

In 19+ years of marriage we have been through quite a few books, seminars, and group studies on household budgeting. We’re not sure when we first heard the adage that you will spend less if you use cash versus a credit card. It doesn’t really matter, because until recently we didn’t believe it. Tracy believed she could keep track of what we’d charged and therefore stick to our budget. Richard believed the benefits of an affinity card outweighed what we might overspend by charging everything (and we do mean everything) on a Southwest Airlines VISA or Marriott Rewards VISA. We were both deceived.

The biggest deception of all was that we believed we were better than everybody else. After all, we paid our credit card balances every month. That is until the 0% balance transfers proved too tempting to resist. For months we juggled car loans, a new central air conditioning system, and other purchases on such cards. We thought we were so clever because we weren’t paying interest. (We were stickin’ it to the man, man! Richard says.) And because we continued to pay the interest-charging credit card balances in full every month, our superiority complex remained in full force. But the truth is, we were not living within our means. We had no emergency savings put aside. If Richard had lost his job, our ship would have started sinking within a month.

About four years ago we went through the Crown Ministries Biblical Financial Study and decided to bite the bullet. We would see for ourselves if the cash system really works. Tracy set up cash envelopes for groceries, household items, and personal spending money. (See DaveRamsey.com.) For purchases like gasoline and situations where the cash envelopes are less convenient we use the debit card and immediately subtract the charge from the checking account balance. Tracy finds the envelope system especially helpful in keeping track of the food budget. “It’s easy to see when we’re getting low on cash,” she says. “That encourages us to consider what’s already in the cupboard to see how we can get by until the next paycheck.”

Does the cash system work? Absolutely. A Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. And McDonald’s found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash. (See “Sound Money Tips” guide to credit cards, www.soundmoneytips.com.)

It isn’t easy to determine exactly how much we saved by switching to the cash system. But our emergency account has climbed to 3 months of savings and we are working toward 6 months. In 2007 we paid cash for a 2002 Ford Taurus. When the $%#@ Taurus had to have the catalytic converters replaced last spring, we paid cash for that, too. And we never stopped tithing; in fact, we’re giving beyond 10% to support other charities we care deeply about.

We are convinced. When it comes to our family budget cash is king, second only to the King of Kings, Jesus Christ.

Copyright © 2008 Richard M. Potter. All Rights Reserved.

Philanthropy's Roots Run Deep in USA

Many consider Andrew Carnegie and John D. Rockefeller to be the fathers of modern philanthropy. But the tradition of giving in America goes back much farther. Here is a nice story from Real Texas Blog that suits the holiday season, and the spirit of philanthropy, quite well.

Many thanks to Eric McL for turning me onto this story.

Christmas in 1881

Pa never had much compassion for the lazy or those who squandered their means and then never had enough for the necessities. But for those who were genuinely in need, his heart was as big as all outdoors. It was from him that I learned the greatest joy in life comes from giving, not from receiving.

It was Christmas Eve 1881. I was fifteen years old and feeling like the world had caved in on me because there just hadn’t been enough money to buy me the rifle that I’d wanted for Christmas. We did the chores early that night for some reason. I just figured Pa wanted a little extra time so we could read in the Bible.

After supper was over I took my boots off and stretched out in front of the fireplace and waited for Pa to get down the old Bible. I was still feeling sorry for myself and, to be honest, I wasn’t in much of a mood to read Scriptures. But Pa didn’t get the Bible,instead he bundled up again and went outside. I couldn’t figure it out because we had already done all the chores. I didn’t worry about it long though, I was too busy wallowing in self-pity. Soon Pa came back in. It was a cold clear night out and there was ice in his beard.

“Come on, Matt,” he said. “Bundle up good, it’s cold out tonight.” I was really upset then. Not only wasn’t I getting the rifle for Christmas, now Pa was dragging me out in the cold, and for no earthly reason that I could see.

We’d already done all the chores, and I couldn’t think of anything else that needed doing, especially not on a night like this. But I knew Pa was not very patient at one dragging one’s feet when he’d told them to do something, so I got up and put my boots back on and got my cap, coat, and mittens. Ma gave me a mysterious smile as I opened the door to leave the house. Something was up, but I didn’t know what….

Outside, I became even more dismayed. There in front of the house was the work team, already hitched to the big sled. Whatever it was we were going to do wasn’t going to be a short, quick, little job. I could tell. We never hitched up this sled unless we were going to haul a big load. Pa was already up on the seat, reins in hand. I reluctantly climbed up beside him. The cold was already biting at me. I wasn’t happy. When I was on, Pa pulled the sled around the house and stopped in front of the woodshed. He got off and I followed.

“I think we’ll put on the high sideboards,” he said. “Here, help me.” The high sideboards! It had been a bigger job than I wanted to do with just the low sideboards on, but whatever it was we were going to do would be a lot bigger with the high side boards on.

After we had exchanged the sideboards, Pa went into the woodshed and came out with an armload of wood - the wood I’d spent all summer hauling down from the mountain, and then all Fall sawing into blocks and splitting. What was he doing? Finally I said something.

“Pa,” I asked, “what are you doing?”

"You been by the Widow Jensen’s lately?” he asked. The Widow Jensen lived about two miles down the road. Her husband had died a year or so before and left her with three children, the oldest being eight. Sure, I’d been by, but so what?

"Yeah,” I said, “Why?”

“I rode by just today,” Pa said. “Little Jakey at the woodpile trying to find a few chips. They’re out of wood, Matt.”

That was all he said and then he turned and went back into the woodshed for another armload of wood. I followed him. We loaded the sled so high that I began to wonder if the horses would be able to pull it. Finally, Pa called a halt to our loading, then we went to the smoke house and Pa took down a big ham and a side of bacon. He handed them to me and told me to put them in the sled and wait. When he returned he was carrying a sack of flour over his right shoulder and a smaller sack of something in his left hand.

“What’s in the little sack?” I asked.

"Shoes, they’re out of shoes. Little Jakey just had gunny sacks wrapped around his feet when he was out in the woodpile this morning. I got the children a little candy too. It just wouldn’t be Christmas without a little candy.”

We rode the two miles to Widow Jensen’s pretty much in silence. I tried to think through what Pa was doing. We didn’t have much by worldly standards. Of course, we did have a big woodpile, though most of what was left now was still in the form of logs that I would have to saw into blocks and split before we could use it. We also had meat and flour, so we could spare that, but I knew we didn’t have any money, so why was Pa buying them shoes and candy? Really, why was he doing any of this? Widow Jensen had closer neighbors than us; it shouldn’t have been our concern.

We came in from the blind side of the Jensen house and unloaded the wood as quietly as possible, then we took the meat and flour and shoes to the door. We knocked. The door opened a crack and a timid voice said,”Who is it?”

“Lucas Miles, Ma’am, and my son, Matt, could we come in for a bit?”

Widow Jensen opened the door and let us in. She had a blanket wrapped around her shoulders. The children were wrapped in another and were sitting in front of the fireplace by a very small fire that hardly gave off any heat at all. Widow Jensen fumbled with a match and finally lit the lamp.

“We brought you a few things, Ma’am,” Pa said and set down the sack of flour. I put the meat on the table. Then Pa handed her the sack that had the shoes in it. She opened it hesitantly and took the shoes out one pair at a time. There was a pair for her and one for each of the children - sturdy shoes, the best, shoes that would last. I watched her carefully. She bit her lower lip to keep it from trembling and then tears filled her eyes and started running down her cheeks. She looked up at Pa like she wanted to say something, but it wouldn’t come out.

“We brought a load of wood too, Ma’am,” Pa said. He turned to me and said, “Matt, go bring in enough to last awhile. Let’s get that fire up to size and heat this place up.”

I wasn’t the same person when I went back out to bring in the wood. I had a big lump in my throat and as much as I hate to admit it, there were tears in my eyes too. In my mind I kept seeing those three kids huddled around the fireplace and their mother standing there with tears running down her cheeks with so much gratitude in her heart that she couldn’t speak.

My heart swelled within me and a joy that I’d never known before, filled my soul. I had given at Christmas many times before, but never when it had made so much difference. I could see we were literally saving the lives of these people.

I soon had the fire blazing and everyone’s spirits soared. The kids started giggling when Pa handed them each a piece of candy and Widow Jensen looked on with a smile that probably hadn’t crossed her face for a long time. She finally turned to us. “God bless you,” she said. “I know the Lord has sent you. The children and I have been praying that he would send one of his angels to spare us.”

In spite of myself, the lump returned to my throat and the tears welled up in my eyes again. I’d never thought of Pa in those exact terms before, but after Widow Jensen mentioned it I could see that it was probably true. I was sure that a better man than Pa had never walked the earth. I started remembering all the times he had gone out of his way for Ma and me, and many others. The list seemed endless as I thought on it.

Pa insisted that everyone try on the shoes before we left. I was amazed when they all fit and I wondered how he had known what sizes to get. Then I guessed that if he was on an errand for the Lord that the Lord would make sure he got the right sizes.

Tears were running down Widow Jensen’s face again when we stood up to leave. Pa took each of the kids in his big arms and gave them a hug. They clung to him and didn’t want us to go. I could see that they missed their Pa, and I was glad that I still had mine.

At the door Pa turned to Widow Jensen and said, “The Mrs. wanted me to invite you and the children over for Christmas dinner tomorrow. The turkey will be more than the three of us can eat, and a man can get cantankerous if he has to eat turkey for too many meals. We’ll be by to get you about eleven. It’ll be nice to have some little ones around again. Matt, here, hasn’t been little for quite a spell.” I was the youngest. My two brothers and two sisters had all married and had moved away.

Widow Jensen nodded and said, “Thank you, Brother Miles. I don’t have to say, May the Lord bless you, I know for certain that He will.”

Out on the sled I felt a warmth that came from deep within and I didn’t even notice the cold. When we had gone a ways, Pa turned to me and said, “Matt, I want you to know something. Your ma and me have been tucking a little money away here and there all year so we could buy that rifle for you, but we didn’t have quite enough. Then yesterday a man who owed me a little money from years back came by to make things square. Your ma and me were real excited, thinking that now we could get you that rifle, and I started into town this morning to do just that, but on the way I saw little Jakey out scratching in the woodpile with his feet wrapped in those gunny sacks and I knew what I had to do.

"Son, I spent the money for shoes and a little candy for those children.I hope you understand.”

I understood, and my eyes became wet with tears again. I understood very well, and I was so glad Pa had done it. Now the rifle seemed very low on my list of priorities. Pa had given me a lot more. He had given me the look on Widow Jensen’s face and the radiant smiles of her three children.

For the rest of my life, whenever I saw any of the Jensens, or split a block of wood, I remembered, and remembering brought back that same joy I felt riding home beside Pa that night. Pa had given me much more than a rifle that night, he had given me the best Christmas of my life.

Don’t be too busy today. Share this inspiring message.
God bless you, And Merry Christmas from Real Texas Blog.com

Billy Tom Curry says, “I say it is historical fiction because it probably is based upon a true story, and may have even been taken from a book, or maybe Reader’s Digest. Fiction probably in the sense that I have received this several times in the past around Christmas time and each time there is a slightly different version. In one, as Matt and Pa get ready to leave the widow’s house she reaches up above the door and takes down an almost new rifle and gives it to Matt with the words that her deceased husband bought it just before he died and she no longer has a need for it. In another version she brings the rifle to Matt the next day when they come for Christmas dinner, telling him the same. In another version Pa unexpectedly get some money the next day and buys the rifle for Matt…BT“

Typhoid Mary, Meet Philanthropy Phyllis

Turns out infecting your coworkers can be a good thing. According to Katherine Carman of Tilberg University in the Netherlands, people seated in cubicles near people who give actually become more generous. "Economic theory says I should want to free ride on other people's contributions," she said. "But in real life, we live in social groups. My research shows that if you give more, I will give more."

Despite the stagnant economy, now is not the time to curtail your giving. Worthwhile charities need your contributions more than ever. Read about why you should give now, and how it will make you feel better too, in today's Christian Science Monitor. And remember, "Generosity begets generosity. Stinginess impoverishes."

If you're giving to causes you care deeply about, spread the word. If you're a tightwad--or have the flu--STAY HOME!

Copyright © 2008 Richard M. Potter. All Rights Reserved.

An Invaluable Infection

The following was originally posted on the Hard Rock Philanthropy page at www.rethos.com.

My New Year’s resolution is to have a better sense of well-being in 2008. Does that sound self-serving and hedonistic? Good! I invite you to adopt the same resolution. But the means by which I suggest we reach our goal may surprise you.

It won’t be by winning the lottery. Money can’t promise happiness. A 1978 study found that there was no significant difference in levels of reported happiness between lottery winners and those who had not won. The same study found that accident victims who had become quadriplegic or paraplegic did not experience any significant difference in their happiness quotient after their tragedy.

Granted, winning the lottery would provide an immediate boost in my state of financial well-being. Becoming a quadriplegic would undoubtedly send me into a deep depression. But neither reaction is likely to last. “We are bad at ‘affective forecasting,’ that is, predicting how we’ll feel in the future. We grossly overestimate the intensity and the duration of our emotional reactions. Within a year, lottery winners and paraplegics have both (on average) returned most of the way to their baseline levels of happiness.” (The Happiness Hypothesis, Jonathan Haidt, pg 85.)

Achieving a greater sense of well-being in 2008 won’t come from buying a new car or moving into a bigger house or acquiring the latest in consumer electronics. I think we have all learned that the immediate gratification that comes from material goods is short-lived at best. It’s only a matter of weeks (days? hours? nanoseconds?) before the next version of the iPhone hits the market, making my three-month-old Motorola flip phone appear shabby and outdated.

Another way to look at your state of well-being is to consider the highest of Maslow’s hierarchy of needs, self-actualization. Once the basic needs of food, clothing and shelter are met, your soul yearns for meaning and purpose. The problem is that our Western Society economy revolves around satisfying material wants. It is not so easy to satisfy meaning want. “Freud’s contention that the most the typical person could aspire to was ‘ordinary unhappiness’ may have been snide, but recognizes a truth. Look for unhappiness and you will surely find it, as unhappiness is a condition anyone can enter. Look for meaning, and you may be tested.” (The Progress Paradox, Gregg Easterbrook, page 211.)

So if achieving our New Year’s Resolution doesn’t come from a major purchase or a positive change in finances or physical health, what is the trick? Pretty much the opposite. A greater sense of well-being requires sacrifice. It requires giving of ourselves and our resources to help others in need.

If you have read other Hard Rock Philanthropy posts you know that this is not a recent revelation. As a slightly-above-average-mid-to-upper-middle-class philanthropist I have long subscribed to Ralph Waldo Emerson’s philosophy: “It is one of the most beautiful compensations of this life that no man can sincerely try to help another without helping himself… Serve and thou shall be served.” For nearly 20 years my wife and I have designated a percentage of our annual income to charity, and I readily accept the benefits of giving to others. What is new for ME, and what I resolve to do in 2008, is to INFECT OTHERS WITH THE PHILANTHROPY VIRUS.

In September the New York Times interviewed billionaire Chuck Feeney, founder of Atlantic Philanthropies. Since 1982 he has given away more than $4 billion. In 2006 alone his foundation gave away $458 million in grants around the world, more than any United States charity except two, the Ford and the Bill and Melinda Gates Foundations. But unlike the Fords and the Gateses and the Buffets and the Winfreys, Mr. Feeney generally prefers to keep a low profile. Asked why he chose to reveal himself through the Times interview, he looked away for a moment.

“A lot of wealthy people, they don’t realize they have the alternatives of spending the money for good,” he said. “If they knew it gives so much satisfaction, I wouldn’t have to persuade them. The press says someone’s ‘one of the wealthiest persons in the world,’ but he hasn’t figured out how many grilled-cheese-and-tomato sandwiches that comes to. How many can you eat?” (Out of Sight, Till Now, and Giving Away Billions, by Jim Dwyer, New York Times, September 26, 2007.)

How many indeed? How many songs do you really need to download to your iPod? For crying out loud, how many do you already have that you never listen to? Do you really need the latest in wireless technology? (Note to reader: I am also pointing the finger at myself!) I am no billionaire. My salary hasn’t yet reached six figures. But simply by my status as a citizen of the USA I am “one of the wealthiest persons in the world.” I know from experience that what Mr. Feeney declares is true. It feels good to give to others. There is great satisfaction to be gained by making a difference in someone’s life. “Psychologists would argue that, as a giver, I am by definition a provider of help, as opposed to a victim. When I am thus empowered, my life improves in all sorts of ways.” (Who Really Cares, Arthur C. Brooks, page 142.)

For me it is no longer enough to give. For the sake of my own personal sense of well-being, I must encourage others to give. I am compelled to spread the news that philanthropy is for everyone. We in Western Society have so much in the way of material goods, yet so many of us lack meaning and purpose in our lives. Purpose can be found in philanthropy.

I have a Big, Hairy, Audacious Goal (BHAG, see Good To Great by Jim Collins). Within my lifetime I want to see philanthropy double in the United States, and as a result, I believe extreme poverty throughout the world can be cut in half.

I was born in 1958. Do the math. I don’t have a lot of time left. Even if I live to be 100 I can’t reach this BHAG by myself. I need a platform for change, and I invite you, dear reader, to join this crusade. Make it your New Year’s resolution to help others, to give more, and to spread this invaluable infection as far and wide as you possibly can.

How wonderful it is that nobody needs to wait a single moment before starting to improve the world.
Anne Frank

Copyright © 2008 Richard M. Potter. All Rights Reserved.

US versus Bill Gates

I discovered The GiveWell Blog and accompanying web site this week. Although it appears to be targeted toward the upper crust of USA citizens - the founders are Ivy League grads and former hedge fund managers - the content is relevant to anyone seeking an opportunity to make a difference in the world (i.e. those of us who make up the soft, creamy filling underneath that tender crust).

If you are still of the opinion that philanthropy is only for big foundations and the super-rich like Bill Gates, check out this pie chart to the right. According to the folks at GiveWell, "individual donors give over 100 times as much as the Gates Foundation and over 6 times as much as all foundations combined."

GiveWell "believes that generosity and good intentions are nice - but not enough. Whether you want to help the homeless, fight disease, or do something we haven't covered yet, we believe you can accomplish a lot more good - and change a lot more lives - by finding the best possible charity in your area of interest. We exist to help you do just that."

The GiveWell website is a great resource for anyone with the inclination to make a difference in the world through philanthropic activity. It doesn't matter if you have $10 or $10,000 to give away... you need to base your giving decisions on good information to make sure your philanthropic investments have the greatest possible return.

Now take a look at that pie chart again. Look at the teeny tiny sliver that represents Bill Gates. Now look at the overwhelming majority that represents the rest of us. Imagine if each one of us decided to give away just one or two percent more this year than we did last. That's a lot of dough to make the philanthropic pie even bigger. And with the help of web sites like GiveWell, we could have a really powerful impact on the world.

One more thing. Good intentions aren't enough, I agree. But if you're only giving away money, you're leaving a lot on the table when it comes to the personal benefits of philanthropy. I'm talking about the self-serving, hedonistic pleasure that comes from seeing good things happen as a result of your efforts.

Invest your time in something you feel passionate about, do it regularly, and you'll see what I'm talking about.

Copyright © 2007 Richard M. Potter. All Rights Reserved.