3 Reasons Donating Money Can Be Good For Your Wallet

Whether you got a big bonus from work or you can spare some change for those who are struggling, donating money can actually help your wallet. Here are three reasons why you should donate today.

donation drive

Singapore has one of the highest GDP (in PPP) per capita worldwide. Despite this, Singaporeans tend to donate less than those in other wealthy nations. However, donating money to charity is a great way to spend some of the additional cash you made throughout the year. This is because donating can not only help those around you, but it can also give you “money back” through government and credit card incentives.

Below, we’ve listed 3 reasons why donating money can improve your finances.

Related: How to Save Money Amidst High Inflation in Singapore

Source: Unsplash

Examples of Charitable Organisations in Singapore

Action for AidsWorking to end HIV transmission and AIDS in Singapore
Animal Lovers LeagueA registered no-kill shelter that aims to control the stray animal population through sterilisation not annihilation
Beyond Social ServicesDedicated to helping children and youths from less privileged backgrounds break away from the poverty cycle
Habitat for HumanityBuilds homes across Asia-Pacific and rehabilitate flats in Singapore for vulnerable families
Nature Society SingaporeDedicated to the appreciation, conservation, study and enjoyment of the natural heritage in Singapore
Riding for the Disabled Association SingaporeProvides horse-riding therapy for physically and mentally challenged children and adults
Singapore Anti-Narcotics AssociationAssist people in their recovery from drug addiction
TOUCH Community ServicesServes the needy and disadvantaged
Yellow Ribbon ProjectEngages the community in giving ex-offenders a second chance at life

1. You Can Get a Tax Rebate

One reason why donating money can be good for your wallet is because you can get a tax deduction of up to 250%.

If you are an animal lover, you may wish to donate to the Animal Lovers League, which runs a no-kill shelter that homes over 500 dogs and cats. If, for example, you decided to donate S$300 to the cause, in your next year’s tax returns, you would get a S$750 deduction on your tax statement.

Types of Tax Deductible Donations
Cash donations for local causes
Cash donations for overseas causes
Shares donations
Aretfacts donations
Donations under the public art tax incentive scheme (PATIS)
Land and building donations
Naming Donations

To ensure you get the tax deduction, make sure your charity has an approved IPC status on the government’s Charity Portal. If it doesn’t, you may not get the returns in your end-of-year statement.

Moreover, it’s important to know that if you receive a benefit like a gift box or clothing item from the donation made, you will not get the full 250%. Instead, you will get the difference between the donation and the value of the benefit. Thus, you should make sure to check the nature of your donation on the IRAS website to understand what will and will not qualify you for a discount.

Related: 5 Best Ways to Reduce Income Tax in Singapore (2024)

credit card online shopping
Source: Pexels

2. You May Get Money Back from Your Credit Card

A second reason to donate money is that you could actually get money back from your credit card, depending on whether or not you have a rewards credit card.

Currently only American Express and Maybank provide rewards for charitable donations.

MaybankAuto PayBills for CharityEarn TREAT points for cash rebate
American ExpressPay with Points +Earn S$6 per 1,000 points

Related: How to Find the Best Rewards Credit Card

3. It Could Help Your Career

Finally, donating to charity could advance your career. This is because spending your money on causes that you truly care about can lead to a great sense of accomplishment and purpose.

Even more, studies have shown that giving your time and money can lower blood pressure, increase self-esteem, lower stress, and lead to greater happiness. In the workplace, this means you are more likely to be relaxed and focused, as your confidence in your role as a benefactor will increase your productivity and self-esteem in the office.

Moreover, choosing a charity to donate to could also put many of the issues that arise in your daily life into perspective. This means you may be more sympathetic to interpersonal issues among staff and try to help your workplace succeed, making you a more productive, team-oriented employee.

women hugging
Source: Unsplash

Donating to Charity Can Help Both You and Your Community

Whether you choose to support a child’s education, animals, or cancer awareness, donating to charity is a wonderful way to support important causes in your community.

Better yet, it can give you some additional benefits too. This is because you can get tax deductions at the end of the fiscal year, earn rewards on your credit card, and help with your productivity at work.

Before you donate to charity, however, make sure you are donating to an IPC-registered charity and your credit card will qualify your purchase in their rewards scheme. In this, your philanthropic endeavors will help both your community and you.

Compare The Best Credit Cards in SingaporeFind Out More

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Cover image source: Unsplash

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