What would you do with $500 million?

Applying Subsidiarity to Giving

Let’s say a Catholic man in his 60s came to me and said, “I just sold my business and will net $500 million after taxes, what do you recommend I do with the capital?” This is a possible response I would give.

Obviously, the amounts could be scaled for a smaller amount, but I chose a large number to be able to talk about a greater variety of possibilities and more importantly to illustrate the principle of subsidiarity when it comes to giving.

If you have ever played the lottery or thought about what it might be like to be very wealthy, I am sure you have played this game before. But the purpose of this essay is to illustrate how one might go about giving away a great fortune from a Catholic point of view.

For the fun of it, let’s pretend that person is you. You just inherited $500 million after taxes. What should you do with all that money?

1. Family – The first thing to consider is your family because they are your primary responsibility.

a. How much do you think you and your wife could possibly need to be able to maintain a virtuous Christian lifestyle and take care of any health needs between now and your deaths? Do not underestimate this number as the requirements and duties of managing a half billion dollars are rather extensive.

b. How many children and grandchildren do you have? Are they all practicing the Catholic faith? How much money would you like to leave them when you die?

c. How much could your family members use for things like, eliminating their student loan debts or mortgages, and providing the best possible Catholic education and professional education you could possibly give them—meaning those that are not yet in a viably career or already married or in religious life?

d. Are there any children or grandchildren that you would like to provide income for so they can pursue the arts or serve the Church in a way that they are well disposed to, without having to worry about generating a yearly income? In other words, are there any other members of your family that you would like to provide a temporary or permanent annual income for, at this time or in the future?

Let’s say the number is $50 million for personal household, and family members. That might sound like a lot, but keep in mind that 90% of this will remain invested. The recommended income to take from your investments for living expenses is 4%-5% annually, so the annual income on $50 million would be no more than $2.5 million the first year. If you have a large family, that might not be enough for everything you are looking to do for your family this years, but let’s say it is, for now.

With the remaining $450 million, maybe you want to spend it down before you die, meaning you do not want to set up a perpetual foundation to continue giving the money away after you die. That would be wise. It is very difficult to rule over your money from the grave, so let’s say you invest it, but withdraw 10%-20% a year for charitable giving. You had better start with 10% for now, because giving away $45 million a year is harder than it sounds, if you want to do it responsibly.

First, even though you would get a bigger tax break by putting the lump $450 million under the tax umbrella of a family foundation and/or a donor advised fund (DAF), I do not recommend locking it all up like that. There are some charitable gifts, and political gifts, that cannot be given from a foundation because of the regulations.

I assume you already have good lawyers, but you will likely need a few more to help you plan your philanthropy. I recommend finding Catholic lawyers who can support you in putting family and Church first.

Subsidiarity in Giving

It is important to practice subsidiarity in our giving because giving is an act of love, an act of charity, a work of mercy. We have a moral obligation to be the most generous with our neighbor. Loving your neighbor (literary, the one who is neigh/close) means loving those who are closest to us: wife, children, family, pastor, spiritual father, godchildren, parishioners, local communities, local schools, local initiatives, etc.

It is a precept of the Church that we provide for the needs of the Church. Following the principle of subsidiary, this means you should begin with your parish and your local monastery.

2. Your Parish- What are the needs of your parish?

a. Is the pastor’s salary big enough to ensure he is able to devote his life to the sacraments—daily mass, frequent confessions, visits to the sick, etc.— and to the proper administration of the parish?

b. Does your parish have a large enough staff to do what the pastor would like to do? Do you have a director of sacred music, for example, or does your pastor need a secretary or a housekeeper?

c. Does your parish have a school? If not, consider participating in the founding of a school? What would make it better? Do you have enough parishioners to justify a high school or a vocational school?

d. How strong is the catechetical program? How could it be stronger?

e. What other apostolates does your parish have or do you wish it had? Is there an outreach to the poor?

f. Do you need a new church or are the buildings in need of renovation? How could you help make the buildings more beautiful? Is it time to tear down that church built in the 1970s and replace it with something heavenly?

g. You get the point.

3. Local monastery—The next thing to consider is whether or not you have a local monastery or religious community that you would like to support, and if not, I recommend working on bringing a community into your locale. The work of prayer and fasting is vital for the health of the Church. It is also traditional to have a confessor/spiritual director who is a priest monk. The Church is in desperate need of a monastic revival.

4. Local Catholic schools—Supporting the work of Catholic education is probably the most important thing to support after the parish and your local monastery. We, as a Church, should also be working to restore religious communities for the work of education.

5. Health clinic—One of the works of charity is to care for the sick. Many religious communities and Catholic organizations over the centuries have dedicated their lives to providing medical care for the sick. Providing medical care for the poor is not the responsibility of the state but of the Church.

6. Poverty relief—Your local city likely has one or more homeless shelters, drug rehabilitation centers, soup kitchens, thrift stores, etc. These are best when run by holy men and women who have a unique vocation to be face to face with the poor. Support those who are doing this in accordance with the Gospel.

7. Local politics—It is sometimes possible to advance the common good of your community through political means. If this is something you are competent at discerning, consider giving something to local political initiatives.

What if I live in a small community?

Let’s say you think you can responsibly give away $20 million a year to your local community, including your parish, etc. as enumerated above, but more than that would be irresponsible given the size of your community or the competence of the people running the organizations.

You have another $25 million to give away each year. What do you do with this remainder?

Once you have taken care of your family and your local community, you can start to think about the Church and people outside of your community.

8. Diocese/Eparchy—It is good to support your bishop, especially if he is a good bishop and has worthy projects in mind. The chancery office is often understaffed and underpaid; you could look into it. Supporting seminarians for your diocese is also very important.

9. Religious communities and monasteries—If you have a favorite order or community that you would like to support on a national or global scale, by all means do it!

10. Catholic Higher Education—Consider committing to a number of annual student scholarships or sponsoring a faculty chair at your favorite Catholic College. Or perhaps the campus has a building project. If you are looking to give a few large gifts without too much “looking under the hood,” this might be your best bet. Catholic higher education is the future of the Church, and the Newman guide has created a great incentive for Catholic Colleges in America to be faithful to the Magisterium.

11. Hospitals—Catholic Hospitals are also candidates for large gifts.

12. Politics—Again, if you think you can make a difference for the common good politically by supporting a particular effort, this could be a giving category, but notice I put it last, because in the order of subsidiarity, it comes last, after supporting your family and the Church.

Note to the reader: The point of this essay was to help think through the subsidiarity of giving. Of course, 99.9% of my readers will never have $500 million (unless we have hyperinflation without a currency restructuring), but I hope you can better see what giving looks like at scale, so that you can better order your own giving priorities.

Many of us may never be able to give money to those outside our family beyond little gifts to our parish, our local monastery, a friend in need, or the local center, and that is okay. In fact, if you can see this, and you can be okay with it, you can be at peace knowing you are fulfilling the Gospel mandate.

God bless your generosity!