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Helping others during the Covid-19 crisis can help your own emotional, financial well-being

As Covid-19 cases continue to rise and businesses struggle to adapt to their new normal, many Americans are stepping up to help people in their communities. From personal gestures to financial contributions, experts say giving back in many ways — big and small — can have a significant impact on your own well-being, emotionally and financially. 

“It gives people a sense of purpose, feeling that even though in these difficult times, there’s something I can do about it, that I have some sense of, some feeling of control, even when everything else feels out of control,” says Dr. George James, a licensed marriage and family therapist and chief innovation officer at the Council for Relationships, a nonprofit behavioral health organization in Philadelphia.

Alleviating stress and anxiety

Research shows helping others in a crisis can be an effective way to alleviate stress and anxiety. In this pandemic, psychologists say turning our attention away from rising coronavirus cases, daily death tolls, job losses and economic turmoil to ways we can help others get through this crisis can make it easier for us to cope as well. 

“If we can distract ourselves, we move away from the constant thought, the worry, the overthinking, and one of the best ways to distract yourself is to help somebody else,” said Dr. James, a member of the CNBC Financial Wellness Council. 

Sewing masks, creating personal protective equipment, feeding frontline workers, coordinating rides to appointments for cancer patients and raising money for charities, shuttered businesses, as well as families and individuals in need are just some of the ways people have found to uplift their communities.  

People applaud to show their gratitude to medical staff and essential workers on the front lines of the coronavirus pandemic outside NYU Langone Health hospital on May 22, 2020, in New York City.

Noam Galai | Getty Images

Improving your financial well-being

In addition to the emotional benefits, giving to others can also help your financial well-being, experts say. “What giving can teach you is that ultimately finance is a lot more than just about money. Money is simply a tool to help you achieve your goals, and the way you use your money should align with your values, including supporting the causes and issues that you care about,” said author and certified financial planner Carrie Schwab-Pomerantz. 

Before you give, do your research to make sure you understand how the money, time or resources you are donating will be used. The Federal Trade Commission warns that fake charities and fundraisers use the same tactics to reach donors as legitimate charities, whether face-to-face, by email, phone or social media. It’s especially important to do your research before giving out any personal information or making a donation. Go to Charity Navigator and GuideStar to get information about a charity’s mission, track record and financial stability. 

Consider the tax breaks on your charitable contributions, too. Donating money to a charity could result in additional tax savings in light of new provisions under federal coronavirus relief provisions. The CARES Act provides a new “above the line” charitable contribution deduction of up to $300 if you claim the standard deduction in 2020. If you itemize deductions, limits on charitable contributions are raised from from 60% up to 100% of 2020 adjusted gross income. 

And if you have the financial resources to make a large donation, you don’t have to decide on where to give the money right away. Opening a donor advised fund — a charitable investment account — at a brokerage firm or large foundation lets you make gifts of cash or stock to charitable organizations over time. 

“With a donor advised fund, you can qualify for a current-year tax deduction and then recommend grants to charities in the future. You have time to decide — and there’s opportunity to invest the donation to potentially grow in value to make even a larger gift,” said Schwab-Pomerantz, who is also board chair of Schwab Charitable. However, she said, contributions to a donor advised fund aren’t part of the CARES Act expanded charitable deduction limits. 

At Schwab Charitable the minimum to open a donor advised fund is $5,000, a hefty sum for most Americans at this time. However, you can then give grants of as little as $50 to many charitable organizations over several years. 

No matter how you choose to give, any type of donation will likely be treasured. 

Daniel Bonnet runs a food distribution center in New Rochelle, New York, where volunteers have served food and meals to as many as 18,000 people a week since early March. The city was the initial epicenter of the coronavirus in the state, yet he said many of the same volunteers have come back week after week. “Members of our community are so grateful and thankful. For the staff and volunteers that are doing that every day … getting that feedback and a positive sense of motivation really fuels them,” he said.  

Emerson Mazzone agreed. People helping people drives many givers. “There’s so much uncertainty and hopelessness that the ability to help in a way you know you’re making an impact is really big,” he said. “It’s a really big deal. People have more time to take stock in their lives now and make more deliberate decisions about how you’re giving back.” 

TUNE IN: Invest In You: Ready. Set. Grow Your Future –  A CNBC + Acorns Town Hall Special

Join us on TONIGHT, July 16th at 7 p.m. ET for a live hour-long special hosted by Kelly Evans and Jim Cramer, where we will bring together everyday Americans who have been greatly affected by the current health, social and economic crises. The town hall will feature advice from Suze Orman, Gary Vaynerchuk and members of the CNBC Financial Advisor Council answering questions about how to reset your financial life amid the Covid-19 pandemic. Join us. 

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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