Is Generosity the Secret to Wealth?
Do generous people have more money than others, or is generosity actually the path to financial health?
This question intrigued me as I prepared for a recent presentation to the Financial Therapy Association. The links between financial well-being and charitable giving are so strong, that I had trouble narrowing down which studies I could reference in my talk. But is this a chicken-or-the-egg question? Is there a connection between financial health and generosity because you have to be financially well-off to be generous in the first place?
One of my favorite ancient Jewish proverbs says this:
One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want. Whoever brings blessing will be enriched, and one who waters will himself be watered. (Proverbs 11:24-25)
And social science is confirming this. For instance, in the study “Happiness Runs in a Circular Motion: Evidence for a Positive Feedback Loop between Prosocial Spending and Happiness” researchers found that giving helps form a positive feedback loop that helps generous people experience better lives, which in turn encourages them to be more generous.
Acts of generosity are much like acts of exercise. Both activities are mostly beneficial when they’re a habit, a regular part of your lifestyle. Healthy people are often better at it, but it is also a path to better health. Neither exercise nor giving is one-size-fits-all: there is no one way that fits everyone’s experience. Sometimes, you feel really clumsy. But, like exercise, doing something is better than doing nothing.
Other research is supporting this. For instance, here are just a few of the benefits that come from a generous lifestyle:
- Generosity helps us connect with others. Researchers have discovered that deciding to give activates the portion of our brain which produces oxytocin, the hormone which promotes social bonding. This speaks to the strong connection between altruism and social connections, so it may partly be the benefits of strong interpersonal connections that motivates us to behave selflessly.
- Generosity reinforces positive emotions. In fact, generosity often triggers chemical systems in the brain and body that increase pleasure and experiences of reward, reduce stress, and suppress pain, which tends to lead to greater happiness and health. Scientists have uncovered that when research subjects acted generously, their brains would release dopamine — the neurotransmitter that helps control our brain’s pleasure and reward centers.
- Giving reinforces the perception of living in a world of abundance and blessing. Not only does practicing generosity help us cultivate our own contentment, people who give perceive themselves as more “blessed” in life, compared to others with similar incomes and circumstances. In a society that says having more is the key to contentment, generosity is crucial.
- Generosity helps us combat selfishness. University of Pennsylvania researchers found that in a strategic game involving multiple people, being generous and cooperative led to more success than selfish strategies. You might think that being generous in a strategy game wouldn’t pay off, but when many players play generously, they all benefit.
Everything points to the conclusion that generosity is the path to wealth after all, especially if you measure true wealth: an abundance of meaningful relationships, contentment, and satisfaction.
Looking to take the right steps forward in your own generosity? We’ve written a number of posts that may help you get started:
- Explore becoming more strategic with donations
- Simplify with a Donor-Advised Fund
- Make a major gift in a way that’s smart
- Determine whether or not you should give to overhead
I personally benefited much from the book The Paradox of Generosity, which outlines the vast amount of research being done about generosity, and how it in turn helps the giver.
A wise way to become generous is to simply get started, and if you’re already in the practice, keep at it. We’re here to come alongside you as you steward your resources and give generously.
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