I’d like to do more to help my beloved local businesses during this crisis, but I’m not sure if it’s financially wise to spend money on anything but essentials right now. I’m a freelancer with a steady stable of clients, but like most work, mine has gone completely quiet since March. I’m supposedly eligible for unemployment insurance, but my claim is still pending and I’m not sure when (or if) it will go through. My husband is a teacher, and we still have his paycheck and benefits, but we do need my income to pay our bills.
It’s normal for me to go through less busy periods of work, so I keep enough cash in the bank to cover about six months of living expenses (taking my husband’s salary into account), provided we cut back on things like eating out and activities for the kids, which we’re obviously doing right now anyway. If unemployment comes through, we should be okay, but it’s all in limbo right now.
My dilemma is that I also want to be supportive to people who need help. For example, if my unemployment insurance comes through, should I buy a gift certificate to support my hairstylist? I’d be saving myself a future expense, but I’d also then be depriving the business of future income, so is that even much use?
Right now, it seems like we’re all in survival mode. I feel like I should be financially responsible and eliminate all extras. On the other hand, my community is important to me. What’s the best way to be careful and still supportive to others?
I think most of us are in a state of seesawing between wanting to hoard and wanting to give, partly because we don’t know what we need to prepare for. My own donations have been scattershot; during bouts of acute helplessness, I flail around on the sofa with my laptop, clicking on various GoFundMe pages and hoping my dollars zoom off to a place more useful than I feel. Then doubt sets in: Should that money have gone to someone who needed it more? Or, more shamefully: What if there’s a time when I wish I’d saved it?
Faced with terrifying projections of a recession even worse than the last one, it’s easy to go into scarcity mode, clinging to every cent like Gollum and fearing we’ll never have enough. And you’re right — we should all be tightening our belts right now, defining what we need and what’s cuttable. But in your case (and, I would argue, many people’s), giving to your community might fall into that “needs” category, even if it’s not an “essential” expense, technically.
But before you decide how to support anyone, you need to figure out how much you can give. Your first step is to take stock of your own resources, says Georgia Lee Hussey, a certified financial planner and founder of Modernist Financial. “The ability to take care of yourself and your family is most important,” she says. “If you are economically insecure right now, think realistically about how far your cash flow can go.”
Giving more than you’re comfortable with doesn’t make you more generous — it’ll just burn you out, according to Adam Grant, a psychologist who researches giving behaviors at University of Pennsylvania’s Wharton School of Management. “Selfless giving, in the absence of self-preservation instincts, easily becomes overwhelming,” he writes. Instead, his research shows that the people who make the most sustainable contributions to organizations (which he defines as “those who offer the most direct support, take the most initiative, and make the best suggestions”) draw boundaries to protect their resources, too.
It sounds like you’ve already evaluated your finances, and that years of freelancing have trained you to manage lean times. So you’ve got a leg up here. I also think you’re right to hold off on buying any gift cards until you have a clearer picture of your unemployment insurance. Under the new relief bill, the self-employed (i.e., freelancers) will be eligible for benefits through the end of 2020. The federal government is also currently supplementing those unemployment benefits with an additional $600 a week, but that will only last through July 31. You’ll want to draw up a long-term household spending plan in case your work doesn’t pick up for several more months, and remains slow for a while after that.
On a more uplifting note, your next (and equally crucial) step is to think about who you want to support with the means you do have. “Especially during times like this, when we feel an incredible sense of helplessness, we tend to give out of anxiety,” says Hussey. “But throwing money around in an unfocused way makes us more anxious, not less. It doesn’t satisfy our need to have a sense of control.” Her advice: “Go deep, not wide. Know your values and what’s important to you.”
I struggle with the “values” question — I value a lot of things! (Perhaps this is why my own giving has been so rudderless — “wide,” not “deep.”) But in this particular crisis, when so many people are suffering, whose need is more “valuable” than another’s? Hussey provided a helpful clarifying exercise: “If you’re not sure about your values, write down a list of all your heroes — the people you admire. They can be people from your own life, or people you’ve never met, or even fictional characters. Then, write down the things that you admire about those people, and start grouping those things into particular values that resonate for you,” she says. “Keep whittling those things down, and eventually you’ll get your list of values. They should be action-based — verbs, not nouns.”
From there, figure out what kinds of local organizations align with what’s important to you, and then set up a recurring gift — even $5 a month is better than nothing (and it’s something you can probably spare right now, regardless of your budget going forward, unemployment benefits or not). Recurring donations are often much more beneficial than onetime gifts because they allow organizations to plan their budgets rather than react to whatever’s landed in their laps. One suggestion, if you’re committed to the business owners you know and love, is to look up your local community foundation and donate to it. Community foundations usually provide essential grants to small businesses in their area, and many are now offering coronavirus relief as well.
As for the gift card conundrum: If you’re not sure what’s helpful, ask! “A lot of small businesses owners are telling us how meaningful it is for customers to reach out, just to express their gratitude for the business and say, ‘What can I do to help, if anything?’” says Alexander McCobin, the CEO of Conscious Capitalism, a network of businesses dedicated to giving back to their communities.
While a gift card is essentially just a small, interest-free loan, that’s still better than the few other loan opportunities floating around at the moment. And most people are in such dire need that the trade-off of not getting paid later — once it’s safe for you to leave the house and cash it in— is worth it. “What we’re seeing across the board is that cash is king for businesses right now,” says McCobin. “So many of them are struggling to pay their obligations and survive that buying a gift card can be extremely helpful.”
As you probably know, research shows that generosity — whether you’re giving time, money, or something else — makes you more grateful for what you have, especially when your gifts are concentrated in an area that you feel a strong connection to. But that doesn’t mean you should put the needs of others before your own. Finding that line, and walking it carefully, will be especially tricky over the coming months. But if you can pull it off, that practice will keep serving you long after this is all over.