I’ve seen years-long battles between family members and friends stemming from a financial gift or a loan.
In personal relationships, givers can be sincere about wanting to help you out and, at the same time, expect lifetime recognition as your savior. Or money is given with a side of micromanaging your budget.
Been on the receiving end of the type of giver who wants an update on how you’re using their present?
“Hey, where’s that sweater I gave you? I never see you wear it.”
And they won’t ever see you with it on because it itches or is just not your style. You don’t want to hurt their feelings, so you deflect every time you’re asked, hoping the inquiries as to your use of their gift finally stop.
Except, they never do.
Taking “free” money from parents, relatives or friends might seem like the better alternative to high-interest debt, that is, until you realize the funds come with emotional fees you’ll be paying off for years.
I was reminded of this recently because of the legal melodrama involving President Donald Trump and the John F. Kennedy Center for the Performing Arts. Now that a court has barred carving his name into the facade, he’s opted to shut the doors and threatened to withhold repair funds entirely.
The situation isn’t identical, because the president is not offering to provide the funds himself but instead is controlling taxpayer money. Trump is treating the Kennedy Center as part of his personal real estate portfolio and trying to dictate the terms of renovation. The president has suggested that without grand public praise, there’s no money.
It speaks to a broader phenomenon: When people are handing out money, they often want something in return.
Generosity should be guided by empathy, humility and selflessness. As children, we are taught that it’s better to give than to receive.
When generosity comes with a strings-attached price tag, the situation can get ugly.
This is why you need ground rules for both the giver and the receiver.
Rules for the receiver
Ask for the money as a gift. You may feel obligated to frame your request as a loan because you think it’s more likely you’ll get the money. But if you are struggling, don’t make a promise you’ll find hard to keep. If you insist that it be a loan, honor your word. If you find you can’t make a payment, don’t ghost the giver.
Be willing to be transparent. If you ask for help, don’t be offended if they ask to see your budget or financial statements. It’s not fair for you to expect someone to hand over their hard-earned money without making sure it’s well spent.
Don’t ignore the price of “free” money. If accepting cash gives the donor a vote in decisions you’d rather they not have, the cost is too high. It may serve you better to find other ways out of your financial jam. Find a second job or get help from a credit counseling agency rather than accept assistance that will make you regret ever asking.
Rules for the giver
Never lend money; only give what you can afford to never receive back. Expecting repayment can ruin your relationship if you don’t get reimbursed. Or you end up monitoring how the person lives their life while they owe you, resenting every splurge they make.
Here’s a tip about giving money to someone in a financial bind. If my husband and I offer to help with an expense — it’s always a joint decision in our marriage — we pay the company or creditor directly.
Let go of your ego. Check your motivation. Is your philanthropy suffocating or self-serving? Does your check come with judgment?
“There is no odor so bad as that which arises from goodness tainted,” wroteHenry David Thoreau, a 19th-century philosopher.
Are you overly concerned about getting credit for your generosity?
Proverbs reminds us: “Let someone else praise you, and not your own mouth.” And as Matthew cautions: “Be careful not to practice your righteousness in front of others to be seen by them.”
I often think of those passages whenever I catch myself feeling like someone isn’t grateful enough for my help.
Give without craving applause.
Look at donors like MacKenzie Scott, a billionaire philanthropist who gives her money away without fanfare. Instead of seeking recognition, Scott shares her donation data through occasional essayson her website, Yield Giving. In a 2020 essay, she wrote that she pledged to give the majority of her fortune “back to the society that helped generate it,” and “to do it thoughtfully.”
A year later, Scott wrote, “People struggling against inequities deserve center stage in stories about change they are creating. … Putting large donors at the center of stories on social progress is a distortion of their role. We are attempting to give away a fortune that was enabled by systems in need of change.”
Don’t be controlling. Asking standard, up-front questions about how your funds will be used is reasonable before giving. You should do your due diligence to make sure you aren’t enabling bad financial behavior. However, once you hand over a gift, you lose the right to micromanage future choices.
If you see that the person mismanaged your cash, well, lesson learned. Or, it should be.
Whether you’re trying to restore a national icon or just helping a family member pay their rent, do it quietly, with grace and a humble heart.
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