Reader's Choice Charitable Fund Leverages FIRE to Give More

Core to the mission of TicTocLife is to be an avenue for us to give back to the community that helped build our financial independence mindset and meet our early retirement goals.

Part of the way we want to do this is to help spread ideas throughout the personal finance community regarding charitable giving. The principles we’ve learned to build wealth within our personal finances can be applied in similarly novel ways to charitable giving.

Monthly Reader Poll

One of the ways we intend to forward our charitable mission is to encourage readers to participate in guiding our own giving. We’re doing this by providing a monthly poll of charitable organizations around a certain theme.

Your vote in the poll leads us to give to the neediest organization in our monthly roundups.

Our current non-profit reader-directed giving poll is below.

If you’d like to help us decide where our next monthly donation should go, read and review our quick outline of the choices and submit your vote in the poll below.

Poll

The above poll will close at the start (midnight, EDT) on November 24, 2024. As always, we will monitor for vote-rigging or mistakes and reserve the right to override the poll results where necessary.

Reader’s Choice FIRE Fund

How did this giving poll come about?

In August of 2020, we created our first public charitable fund tied to FIRE principles and TicTocLife’s community.

The goals of the Reader’s Choice FIRE Fund are multifold:

Apply FIRE principles to building a charitable fund
Encourage our community to direct the donations
Spread these ideas to multiply giving

How is this charitable fund designed to achieve those goals?

FIRE principles & charitable giving

We will leverage a key principle of FIRE, the 4% rule, in building this charitable fund.

What if, instead of a lump sum donation, we invested the sum in low-cost index funds and donated 4% of the fund’s value annually? Couldn’t we do this, potentially, into perpetuity?

Similarly, we wanted this charitable giving fund’s balance to represent our personal FIRE experience.

In 2019, we spent $40,885 on our living expenses—that’s our FIRE budget. We planned our FIRE number partially based on this figure. We decided that $40,885 would be an appropriate, FIRE-representative balance to aim for in our Reader’s Choice FIRE Fund.

The fund’s founding date, August 8, 2020, is also the three-month anniversary of TicTocLife’s launch. We felt it would be appropriate to set a goal to fully fund our first public charitable fund by TicTocLife’s one-year anniversary date: May 8, 2021.

In order to put us on the right track to reach this goal, we deposited the first quarter of that goal, $10,222, into the fund on the founding date.

Community directed giving

We will incorporate our readers within our charitable mission where possible. Our intention is to hand-select approximately 3-5 charities per month and donate to one of them. Working from the 4% rule, we’ll aim to donate 1/12th of 4% (or 1/3%) of the fund’s value every month to our selected charity.

We will select the charity by narrowing our 3-5 candidates in a community vote. Monthly, we release a Budget Update on or around the first of the month. All future updates, beginning September 2020 will contain our charity candidates for the month and a polling system to vote on them for you, the readers.

We’ll also update this page over time, tracking our historical contributions from the Reader’s Choice FIRE Fund and the charities they went to.

Spreading can multiply giving

It is our hope that by engaging with you, dear reader, the seed for this type of giving strategy could be planted in your mind, too. If we were able to reach a single additional FIRE proponent and nudge them towards giving in a similar way, we would effectively double our own giving.

If it doesn’t make sense for you to give at this stage in your financial independence journey, you might know someone who can. This is the only time we’re asking you to consider sharing our ideas directly. Help us fulfill this mission and purpose behind the TicTocLife project.

Sharing can help grow this idea to other people who have reached FI and can afford to do this. It also promotes FIRE principles outside the existing FIRE community, expanding the movement and showing what good can come from FIRE.

How is this charitable fund constructed?

In August of 2020, we opened a Donor-Advised Fund (DAF) to house our Reader’s Choice FIRE Fund. DAFs help mitigate taxes in a way that can let us contribute more to our chosen charities. They also streamline the process of donating to the recipient charities.

We’ve written more on giving, including ways to incorporate a DAF as part of your strategic giving plan.

Keep an eye out for more articles in the near future that goes into the weeds on DAFs, their benefits, pros, and cons. We’ll update this space.

The Reader’s Choice FIRE Fund from TicTocLife is an account with Schwab Charitable. We fund this DAF from our own personal DAF that houses most of our charitable giving.

We created a “child” DAF with Schwab for this specific purpose in order to be able to have more flexibility with the account’s initial balance, as avoid minimum balance fees, and to be able to make smaller contributions to charities.

Schwab Charitable’s minimum balance is $5,000 and charitable donations can be made as small as $50. There’s a minimum annual administrative fee of $100 (or 0.6%, whichever is greater). Given the related tax benefits and smooth donation process, we feel it’s worth the fee.

DAF Asset Allocation

The DAF’s balance is invested and will grow (hopefully) with the stock market, enabling us to keep giving from this fund into the future. The balance is distributed among low-cost index funds as:

80% stocks
20% bonds

Both asset classes are split 50/50 US domestic and international.

This asset allocation generally matches our personal investing principles and the suggestion of the Trinity Study.

DAF History

We will maintain the ledger below for our Reader’s Choice FIRE Fund, our DAF with Schwab Charitable.

Activity Date	Description	Transaction Amount ($, US)
2020-08-08	Initial Deposit	10,222
2020-09-08	MCV Grant for August	(50)
2020-09-08	September donation	3,407
2020-10-07	AdoptAClassrom.org Grant for September	(50)
2020-10-08	October donation	3,407
2020-11-03	Richmond Animal League Grant for October	(54)
2020-11-03	November donation	3,407
2020-12-01	Heifer International Grant for November	(68)
2020-12-01	December donation	3,407
2021-01-06	Direct Relief Grant for December	(79)
2021-01-06	January donation	3,407
2021-02-06	New Beginnings Incorporation Grant for January	(93)
2021-02-07	February donation	3,407
2021-03-04	National Black Farmers Association Grant for February	(104)
2021-03-04	March donation	3,407
2021-04-02	St. Mary’s Health Wagon Grant for March	(118)
2021-04-02	April donation	3,407
2021-05-02	Girls Who Code Grant for April	(144)
2021-05-02	May donation	3,407
2021-06-03	Conservation International Foundation Grant for May	(156)
2021-07-07	NAMI of Central Virginia Grant for June	(157)
2021-08-01	Side By Side VA Grant for July	(158)
2021-09-03	Healthcorps Grant for August	(161)
2021-10-04	HIAS Grant for September	(154)
2021-11-02	K9s for Warriors Grant for October	(162)
2021-12-18	412 Food Rescue Grant for November	(160)
2022-01-12	One Simple Wish Grant for December	(161)
2022-02-09	International Medical Corps Grant for January	(153)
2022-03-09	100 Black Men of America, Inc. Grant for February	(143)
2022-04-04	CARE Grant for March	(151)
2022-05-15	Oceana, Inc. Grant for April	(150)
2022-07-08	Human-I-T Grant for May	(131)
2022-07-17	FNE International Grant for June	(130)
2022-08-16	FNE International Grant for July	(141)
2022-09-19	Center for Disaster Philanthropy, Inc Grant for August	(134)
2022-10-28	Let’s Win! Pancreatic Cancer Grant for September	(122)
2022-11-29	Water Mission International Grant for October	(131)
2022-12-20	National Indian Child Welfare Association Grant for November	(138)
2023-01-19	Home Instead’s Be A Santa for a Senior Grant for December	(135)
2023-02-16	Malaria Consortium Grant for January	(142)
2023-03-23	Convoy of Hope Grant for February	(131)
2023-04-30	Partnership Against Domestic Violence Grant for March	(135)
2023-05-28	Virginia Capital Trail Grant for April	(137)
2023-06-18	Children’s Lifesaving Foundation Grant for May	(137)
2023-07-16	Greater Richmond Aquatics Partnership Grant for June	(145)
2023-08-15	Feed More Inc. for Grant July	(149)
2023-09-18	Maui Humane Society for Grant August	(146)
2023-10-23	Mr. Hollands Opus Foundation Grant for September	(138)
2023-11-24	HIAS, Inc. Grant for October	(135)
2023-12-21	CARITAS Grant for November	(146)
2024-01-15	The Doorways Grant for December	(152)
2024-02-23	American Heart Association Grant for January	(154)
2024-03-20	American Jewish Joint Distribution Committee Grant for February	(162)
2024-04-16	Connect To Compete Inc. Grant for March	(166)
2024-05-23	Neighborhood Forest Inc. Grant for April	(159)
2024-06-18	Helen Keller International Grant for May	(160)
2024-07-22	The Trevor Project Grant for June	(160)
2024-08-30	The Save the Children Federation Inc. Grant for July	(161)
2024-09-20	Kids In Need Foundation Grant for August	(164)
2024-10-24	International Medical Corps Grant for September	(166)
2024-10-24	Balance	$49,912.04

The last balance update always reflects any unrealized gains since the balance is invested.

This Is Your Charity Fund

If you like this charitable giving idea, please don’t hesitate to steal it. If you’re a FIRE proponent, we hope you like the idea of combining FIRE and giving:

Build a charity nest egg and invest it in low-cost index funds
Leverage the 4% rule and build a system of perpetual giving
Maximize the value of a dollar, especially in giving, with a DAF

The best possible outcome that could come of us publishing this is for someone else to latch onto the idea and use it for themselves. We’re not terribly comfortable publicizing our giving, and so the purpose of making this public is to get you to consider following our footsteps.

Poll History

Our previous charitable fund polls are below for posterity’s sake.

September 2024