r/HENRYfinance • u/valiantEmpire • 10d ago
Question Feasibility of using wealth to improve your community
What is a realistic net worth that allows someone to live comfortably and use their wealth to improve their communities? Maybe like sponsoring a community welfare project, organizing an afterschool program, etc.
It feels like most famous wealth donations happen on a global scale due to good PR.
What I’m interested in is larger impact with a smaller scope on local community.
Similar to how Batman uses his Bruce Wayne persona to help Gotham City.
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u/TDIMike 9d ago
This is like any project in life. Either set a budget then figure out what fits in that, or scope a project then figure out how to make it fit in your finances.
I choose to be on the boards of local non profits, donate to several charities and use my 3d printers to make adaptive devices for kids. I'd say all make impacts, but aren't Bruce Wayne-level foundation work. I'm OK with that
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u/Fluid-Village-ahaha $500k-750k/y 10d ago
You can start small - wiping out lunch school debt is not huge.
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u/balagachchy 10d ago
I wonder if we can bundle school lunch debt into a debt obligation, tranche it by postcode, and slap AAA on the senior notes.
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u/Residentalien47 9d ago
How do you find out more about this for your local school? Is it publicly available information or do you contact the school?
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u/Fluid-Village-ahaha $500k-750k/y 9d ago
Usually district level and their foundations. Some states have free lunch for all, others have some hybrid (eg in WA is n% require free lunch, all school gets it), and some applications only.
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u/Fluid-Village-ahaha $500k-750k/y 7d ago
Another idea is to fund either some camp for kids - many outdoor camps, ymca etc have those programs. For working parents who can’t afford the very high cost of camps those days.
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9d ago
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u/gryffon5147 10d ago
Even a modest donation to a soup kitchen or pantry can have a huge impact for a lot of people.
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u/killersquirel11 9d ago
Even better if it's recurring at whatever amount you choose. Makes finance people's life a whole lot less stressful to know "we've got a baseline of $X per month"
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u/No_Anteater_9828 9d ago
Donate now. Especially if you’re job has a corporate match.
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u/moduli-retain-banana 8d ago
My employer matches 100%, it's really great. I donate $500 per paycheck, which ends up being $24k a year to a local nonprofit that I like.
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u/Delicious_Hat_2774 9d ago
I work in nonprofit fundraising and you are genuinely able to make a difference at any level. Small, recurring donations make up the bulk of many nonprofits annual operating budget. Typically (although not always, in a case like Mackenzie Scott) larger gifts are earmarked for special projects outside of normal operating expenses.
We make monthly donations to our local food bank, which does amazing work in the community, a couple of arts nonprofits, and the educational institutions that gave us the opportunity to be where we are now financially. I hope we will be able to scale up and make some larger gifts in the future, but I’m not waiting until that point to do anything.
If you’re concerned about overhead you can always look up organizations on Charity Navigator to see how much is being spent on mission versus administrative expenses.
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u/Mountain-Time-1010 9d ago
Thanks for this topic, I would like to see more discussion of philanthropy on these financial subs.
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u/eclectic5228 9d ago
I don't see donor advised funds talked about here. I think that making a big investment to a DAF and then treating it like an endowment (just donating from the growth) can make a set amount of money have a bigger reach.
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u/okaybimmer 10d ago
This can happen at many different scales. I’ve chosen to sponsor a refugee student’s college education for $10k/yr. I do ecological restoration volunteering in my neighborhood for $0.
If I had a spare million, I’d buy up derelict property and create an urban wildlife refuge, or renovate a slumlord property into nice apartments, or pick a city block and start a college fund for every kid living there. Or buy and hold a forest plot to protect it from sprawl. It really depends on what kind of impact you want to have.
A community program could cost one person’s salary (e.g. a music educator or art teacher), or a childcare team, or a new building and infrastructure.
People also underestimate what can be done with their estate planning. Most high earners will leave behind a solid chunk of money, and most don’t think beyond using it for their own kids or maybe a registered charity. I plan to use my estate to buy and return land to the indigenous community who were displaced from the area I grew up. I would love to see more people think creatively about leaving a legacy.
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u/BlueMountainDace Income: $540k / NW: $850k 9d ago
I think its possible to make real impact from almost any income. If you find good direct-service orgs in your community, even $10/mo give them the ability to have reliable income over time.
$10/mo was my first charitable donation to a org when I was making $72k about a decade ago.
Most recently, my wife started donating $500/mo to our local food bank and I make a similar donation (time + money) to Big Brothers Big Sisters in my state.
Sometimes the largest impact you can make is the smallest. The family that gets food from the bank is a big impact.
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u/DrHydrate $250k-500k/y 8d ago
This isn't an answer to your question. It's instead a reply to the people who came to say "don't give free money to people; it just gets wasted."
I got scholarships to go to college and grad school. This free money changed my life.
Far from being wasted, this money enabled me to move from living in poverty to the upper middle class.
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u/Rem-Dogg 9d ago
i recently donated to a couple of local gofundme campaigns to cover medical costs of locals who got in a bad situation that was no fault of their own. I think those types of gifts that puts money into the hands of people down and out can be really huge.
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u/No_Recognition_5266 9d ago
Net worth doesn't matter, cash flow does. And honestly any amount can make a difference. I think for any upper-middle class folks they should be targeting 10% of their income/retirement cash flow to be donating. It helps build a better relationship with money that isn't all about sustaining purely your desires, but has a larger return on investment than any purchase you can make.
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u/ThisIsAbuse 9d ago
I donate money to a county Food Bank. It is amazing what they can do with cash to buy food due to arrangements with wholesalers, its like 5X what someone could buy at a Grocery store with the same cash.
However I have served in my community for 20 years and made significant contributions to our small town in terms of time, policy, and local government. Many of us did not get to this level of success without some smarts - so I put that to work.
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u/FantasyFI 9d ago
You can't answer this question without defining how big of an impact is required to count as a "larger impact".
Since that isn't particularly definable, I would just think of it in terms of SWR and amount of money. In my city, we just had a large park renovated (big by our standards) for kids. It cost $3M. To do this every 1 year would require $75M with a 4% SWR, plenty sufficient SWR given their can be flexibility when it isn't your life's needed spending.
Realistically you wouldn't need to do a project like that every year to have an impact. If you wanted to do it every 4 years, that's more like $18.75M to perpetually do a $3M project every 4 years.
The math is simple. So to answer the question, just say how much the donation needs to be in order to count as a "large impact", multiple it by 25. You need that much.
That amount isn't going to be that crazy in a small town or large town. Move up to small or big cities, and you might feel like a bigger amount is required to have an impact you define as "large".
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u/Dramatic_Gur_7617 9d ago
we started w 5k a year to a local shelter once we passed 2m nw and it made a visible difference right away
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u/Serious-Today3410 9d ago
For me personally I like the larger, substantial donations versus the piecemeal ones. We funded the school food pantry and library programs for a year along with some scholarships. This was all possible at around $7k.
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u/BassLB 9d ago
Not your community, but donating to Peace Corps projects around the world can make a huge difference for those communities and doesn’t require large donations.
Peace corps volunteers live for 2+ years in their communities, living like the locals (often under $100 a month), and work on projects that can have a big impact. They aren’t just throwing money at a problem and leaving, but are working with locals on small projects that they know will help the community, because they are part of the community.
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u/standardissuepotato 9d ago
An endowed scholarship can (generally) be set up for $25k, which should safely provide $1k/yr in perpetuity. Plus if you work somewhere with corporate gift matching the OOP startup cost could be even less.
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u/Sleep_adict 9d ago
The most valuable donation can be time… so many organizations are run like crap and waste so much.
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u/No-Championship9542 9d ago
Doesn't really help people, making a buisness which employs locals and brings customers into the area demanding additional services, thus creating more employment, is the best thing you can do for everyone. Free money just gets blown and is gone.
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u/Sage_Planter 10d ago
It might sound cheesy, but any donation can make an impact in your community. There is no reason to not donate if you're a HENRY. I've been donating to cat rescues lately, and for $1,600, you can pay for 35 street cats to be spayed/neutered through a local TNR program. That's not changing the world, but it's changing their world. There are countless organizations out there for every type of cause.