You Can’t Give If You Don’t Have

Amos Lawrence was one of America’s first philanthropists. He built a successful career – and a sizable fortune – in merchandising after the War for American Independence.

However, Lawrence did not use his wealth just to increase his standard of living.  He once wrote to a fellow businessman, “your wants may be brought within a very moderate compass; and I hope you will never feel yourself such means as…may be beneficially applied to those around you.”  Such a spirit of generosity was “delightful” to Lawrence.

In addition to personal spending habits, Lawrence recognized another factor that could limit his freedom to demonstrate generosity: debt.  “During the first seven years of my business,” Lawrence recorded, “I never allowed a bill against me to stand unsettled over [a weekend].”

In both large grants and small, he provided practical gifts like food for families and books for frontier educational institutions – and the extent of his generosity can only be estimated.

Although Mr. Lawrence did not operate completely without debt, throughout the course of his business life, he did determine to practice “a system of rigid economy, and never allowed myself to spend a four pence for unnecessary objects until I had acquired it.”

As a result of this policy, when the financial distress of 1837 shook the nation’s economy, Lawrence was still able to enjoy being generous.  He wrote in his diary, “The violent revulsion in the business of the country, during the past year, has been ruinous to many; but so far as my own interests are concerned, has been less than I anticipated.  My property remains as it was a year ago.  Something beyond my income has been disposed of [i.e., given away]; and I have no debts against me.”

Debt and credit are an expected feature of modern American business.  But contracting a loan or buying on credit is still a voluntary decision – a decision to be made with great care.

Unless the bills are paid, generosity will be hindered.  If you want to develop the character quality of generosity, making prompt payment of bills – or limiting purchases to what money you already have – is a practical necessity.

Since you cannot be generous with funds to which a creditor has a prior claim, enhance your capacity for generosity by carefully managing your resources.

Budget on the Job

Our ability to be generous depends on our ability to meet other financial obligations.  Spreading out expenses over time through credit feels freeing at the outset, but monthly payments – with added interest – can quickly develop a stranglehold on an individual’s or a company’s pocketbook.  The ability to give, even when one has the finances and desires to do so, is thus limited by obligations to creditors.

Evaluate your financial responsibilities.  Wisely managing your funds will free you to enjoy the rewards of generosity.