What Discount Rate do we Apply to Giving? |
August 24th, 2010 |
giving, house, money [html] |
In considering buying a house, we might defer giving for a while until we've paid off the mortgage. If so, we'd charge ourselves interest on the money we were delaying giving to oxfam. How much interest would that be? If it would be at a rate higher than the current mortgage rate, we would do better to take a longer mortgage (30 year), make just the minimum payments, and give away as much as we could. So what we choose for this discount rate matters some. It also matters because if Julia thinks we chose the rate incorrectly then she might either resist or encourage delaying so oxfam can get more money.
I have no idea how to decide what a good discount rate is. Julia's not sure either. I could ask oxfam.
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