About Millionaires Who Give Away Money

by Carlye Jones

Whether for tax benefits, because of personal tragedy or just from having a heart of gold, most millionaires give away money. A Bank of America study found 95 percent of millionaires gave to charity in 2011, according to a CNBC report. Some have given away nearly everything they own, while others manage to give while still maintaining their personal wealth. Either way, it's fascinating when millionaires give away their money, and the rest of us imagine what we would do if we were in the same position.

Impact of Giving

Millionaires who give away money have the power to change hundreds of lives or make a significant impact in a community. While small donations certainly add up and also make an important difference, a millionaire is in the position to donate a large enough sum to bring quick, even immediate results. The donated money can have long-term effects, such as sending students to college, providing homes and food for the less fortunate, or giving someone in unfortunate circumstances a leg up. In many cases, those who have benefited from the money go on to become successful and in turn donate their time or money, continuing the work set in motion by the millionaire.

Ways Millionaires Give

Millionaires who give away money do it for a variety of reasons or a combination of reasons. These donations may be made for tax relief purposes. Wealthy individuals may give in order to be more involved and have more of a say in how a nonprofit spends. Some millionaires give money away because they have been affected in a personal way by a disease or situation. For example, a millionaire with a family member diagnosed with breast cancer is may give money away to help with cancer research or that helps breast cancer victims afford treatment. Some millionaires give money to those in less fortunate circumstances simply because they believe it is the right thing to do. They recognize that they have been fortunate and have the ability to help others. Wealthy people who volunteer the most tend to give the most money, according to Energize Inc.

Effects of Philanthropy

When a millionaire gives, the donation tends to snowball. Not only are others encouraged to give more, the purchasing power of the organization or recipient increases, which makes all of the donated dollars go further. In addition, retailers and suppliers like to get in on the act when a well-known millionaire donates, and stores or manufacturers will often donate products and services to go along with a millionaire's donation. A wealthy donor may also provide the seed money for a fundraising event, paying for advertising, space rental and other costs associated with a fundraiser, making every dollar stretch even more.

Concerns of the Benefactor

Before a millionaire gives away money, he will often investigate the organization he intends to donate to and carefully consider how the money will be used. Like everyone else, he wants to be sure that the money will be used for its intended purpose and that it will be spent carefully. According to the CNBC report of the Bank of America study, millionaires are the most generous when they can be personally involved with the charity or other recipient. The amount of tax saved through donation is also a popular consideration, as is who will actually benefit from the money.

Giving it All Away

Sometimes a millionaire gives away every last dime. Australian Karl Rabeder did so in pursuit of happiness. Whatever the reason, these millionaires should be recognized for their generosity; however, it is a common misconception that those who maintain their wealth don't give as much. By maintaining their wealth, millionaires who give only a portion of their income are able to continue to give year after year and often in greater and greater amounts. Over a lifetime, a millionaire who holds on to his wealth is likely to give far more than a millionaire who gave it all away.

Photo Credits

  • Jeanne Studio/Demand Media