Thursday, April 8, 2010

The Value of Money

I'd like to start this thought process by asking you a few questions: Do you think it if takes you less time to earn $100 the value of that money changes? Let me put it another way, do you believe $100 means more to a person making $50,000 a year than to someone who makes $250,000 a year?

Apparently, many nonprofits are confused when answering these questions because the value of money seems to change! It is almost magical and there is a REAL presumption that more you make the less value the money must have. But is this true?

If you make more or have more money there is a reason. Granted this reason may be because the person was born into wealth or maybe because the person inherited a lot of wealth. People also make different amounts of money in relation to their education and/or job skills. The reason different people have more money than others depends on all sorts of different situations. 

Regardless of how the money was received let's step back again and look deeper into the question of the value of money.

The paper and coin you hold does not discriminate against the buyer. In our example of $100 the same amount of gas or food can be purchased so what is the difference?

Well, it is because one person has more than the other person! Ok, so this means the more money you have the less value you place on it simply because you have more?
Really, is that logical?

Well, it is not just because one person has more than the other; it is really because the more money you have the "easier" life is for you. You know because you don't have to worry as much about different "things.”

Wow, so more money equals happiness and worrying about less "things"!  Ah, wouldn't it be great if life were that simple where you could always count on a + b 
equaling c no matter what day of the week it occurred.

Nonprofits need to understand that the people they are seeking to get a donation from know the value of money just as much as they do. If you make a personal donation to a cause I would suspect you are not doing so in a blind fashion, but responding in either in a very logical way or because of a certain emotion or attachment you feel for the organization.

Don't assume because someone might earn more or have more money than you do that the money somehow means less to them, because in most cases it does not!  

Money does not make you worry less nor does it buy happiness. If it did all the millionaires in the world would be happy about life.  Money is a tool, in the right hands it can create many things, but it is not the solution to fixing all problems!  

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