In recent weeks, you might have noticed I have made small adjustments to the site in the effort to try to monetize it slightly more than previously (e.g. by posting this unbiased review).
As this blog slowly starts making an income, I must figure out what to do with the profits I make on the site from sponsored posts, affiliate programs and ads.
As you’ll see in my monthly reports the blog generates a relatively small revenue, but it is still big enough to turn a profit after I have paid for hosting, web development, promotions and other costs of the site.
So, what do you do with money left on your corporate bank account?
I could spend the money on either:
- Investing it in growing MoneyMow further (before corporate tax)
- Paying it out as salary (personal income tax)
- Investing it in other assets such as stocks and bonds (after corporate tax)
- Donating it to charity (tax-deductible)
- Donating it to research (tax-deductible)
- … or something else
There’s some tax-related advantages and disadvantages to each of these choices, and I am no expert here (there are lots of buts and ifs), but I have tried indicating what might be the case.
Now, I have decided I don’t want to pay myself salary or invest the profit in stocks and bonds. This leaves me with the option of donating it or investing it in MoneyMow. I am going to do both.
I have decided to donate 20% of my profits to charity and invest the remaining 80% in growing MoneyMow further. The reason I want to invest 80% in growing MoneyMow further is to make sure I can actually make some serious money and therefore donations to charity in the future.
This was my donation of 2,000 DKK to Save The Children in 2018 (in Danish, sorry!):
Why I’ll donate a share of my profits to charity
I am writing about financial independence every week. The financial independence mindset has a habit of assuming that our world will remain unchanged.
Save a lot, invest your money and you’ll be fine. Sure, the market will go up and down, but in a decade you’ll be set for life and you can retire happy regardless.
Now, this assumes we will have an Earth to live on that is as great as the one we have today.
Unfortunately, I’m very worried our planet Earth is heading in the wrong direction. Although it is making great achievements in some areas (people dying in wars, share of people living in extreme poverty, child mortality, literacy etc.), I believe we are headed for disaster in others.
I’m mostly worried about two things; climate change and growing global inequality. Now, these are incredibly big topics and I am not going to provide evidence nor discuss them in this blog post – you’ll find plenty of evidence using other sources.
I’m genuinely worried about our mindless focus on growth and its resulting consequences for the Earth’s climate.
All experts agree our climate is changing fast and it does not look good. We have very few years to make a difference if we don’t want to suffer the consequences
We are currently using resources equivalent to 1.7 Earths. Our ecological footprint on planet Earth is much larger than it should be. Humans are using the Earth’s resources much faster than the Earth can regenerate these.
If we don’t solve these issues, the world will be a much different place in just a few decades from now. We will suffer from extreme heat, drought, floods, poverty – and we will start seeing a growing problem of climate refugees.
I don’t have kids (yet), but I would want for them to be able to achieve financial independence and enjoy the same Earth as I enjoy today.
I’m also genuinely worried about global inequality. I am talking about economic inequality and power inequality. This is a highly controversial topic and free market evangelists will kill me for this. However, I believe growing global inequality will have disastrous consequences for humanity if we are not able to change the course. Increasing poverty, lower growth, higher crime rates, more refugees etc. will all lead to a worse world for the average Homo Sapien.
Yuval Noah Harari speaks in his recent book about the merger of infotech and biotech, which will certainly accelerate this development. Wealth and power will become more and more concentrated, and the majority of people will become more and more frustrated – we are already seeing the effects of it around the world with the election of Donald Trump and Brexit. On the positive side, people have been frustrated before and have managed to change the world for the better, so I have not lost hope in humanity yet 🙂
Climate change and global inequality are the two reasons (and there’s probably more) I want to donate to charity because I genuinely believe financial independence doesn’t make sense if there’s not a decent world to live in.
Who should I donate to?
Now that you know my rationale for investing, I am curious to hear if you have any suggestions to who I should donate to.
I would like to donate to an organization focusing on tackling the issues of climate change. I am considering donating to WWF, Union of Concerned Scientists, Greenpeace, Friends of the Earth and Environmental Working Group.
I would also like to donate to an organization focusing on tackling the issues of global inequality. Education has been suggested as one of the best ways to e.g. lower inequality, provide equal opportunity, social mobility and raising skill levels to meet technological change. I believe education enables more people to drive change politically. Therefore, I would also like to donate to an organization focusing on educating people around the world. I am considering UNICEF and Save The Children.
I know some of these might not be tax-deductible for a Danish corporation, but that is less important to me than donating to the right charities.
If you can’t convince me otherwise, I will probably support UNICEF and WWF for this year’s donations.
Your turn: What do you think? Who should I donate to?