They say money can’t buy happiness. But what about if you spend it wisely? Prosocial spending — spending money on other people rather than yourself — could enhance emotional well-being and provide other health benefits.

Research highlights that giving can boost happiness, mood, and life satisfaction in diverse samples of people, says Elizabeth Dunn, PhD, a professor in the department of psychology at the University of British Columbia in Vancouver.

“One of the best parts of being human is that we have evolved to find joy in helping others,” Dr. Dunn says.

Here’s more on when and why giving to others can be so good for you.

What Is Charitable Giving?

You could narrowly define charitable giving as the money you donate to a licensed nonprofit organization. But experts often broaden that definition to include any use of your financial resources to benefit others, such as money you spend on friends, family, or strangers.Examples of prosocial spending that turn up in published research include:

• Buying coffee or lunch for a friend

• Helping someone cover a medical expense or bill

• Buying necessities like clothing or gifts for someone else

• Donating money to an organization that helps people in need

It’s worth noting that the benefit you get isn’t linked to whether you’re wealthy or in need of some financial help yourself. Research consistently shows that prosocial or charitable spending tends to do you good.

Why Does Giving Money Away Make Us Feel So Good?

When you stop and think about it, it’s odd that giving away money would make someone feel good when they could otherwise use that money to benefit themselves. Why is this so?

“Prosocial acts may be emotionally rewarding because they reinforce costly but evolutionarily important actions that help us build and create bonds with other people,” says Lara Aknin, PhD, a distinguished professor of social psychology and director of the Helping and Happiness Lab at Simon Fraser University in Burnaby, British Columbia.

Dr. Aknin’s work is part of a broader theory in social and evolutionary psychology that suggests human beings may be hardwired to show altruism and prosocial behavior at times because those tendencies massively benefit one’s group.

Put simply, humans have thrived because we can come together to form large, interdependent groups of unrelated members — and there is strength in numbers.

How Does Charitable Giving Benefit Health and Well-Being?

Along with charitable giving being good for societal cohesion, how does it benefit individual health and well-being?

The 2023 World Happiness Report, which collected charitable giving and well-being data from around the world, indicated that people tend to feel happier when spending money on others than on themselves. The report also connected giving and altruism with greater life satisfaction.A research review involving both Aknin and Dunn as authors also highlighted that prosocial spending brings happiness to the giver. They point out that happiness is especially likely when people have a choice about how they give and have more knowledge of their gift’s impact.

Apart from the happiness bump, there’s evidence that people who spend money on others also reap health benefits.

A systematic review studying the connection between prosocial behaviors and health found that giving money and “paying it forward” improved mental health and helped decrease depression for some people. Other health benefits included higher rates of physical activity and uptake of necessary diagnostic tests.Meanwhile, a study on giving and stress recovery found that participants who chose a gift card to send to someone else (rather than receive one) had lower markers of stress, including higher mood and lower blood pressure and heart rate during the study.

How to Give in Ways That Benefit You and Your Well-Being

Prosocial spending and charitable giving bring numerous benefits, but simply writing a check out to a “good” cause may not confer all the same benefits as giving to a cause that specifically holds meaning for you.

And some evidence suggests that giving solely to boost your own well-being — what could be described as selfish prosocial spending — doesn’t provide the same health or well-being benefits, says Aknin.

“We found some evidence that prosocial acts are less rewarding when enacted for self-gain than when enacted for the benefit of others,” Aknin adds.

So, how can you give in a way that is good for the recipient and for you?

1. Give to Causes You Care About

There are hundreds of worthy charitable causes out there. But experts say people seem to get the most out of giving to causes they find personally meaningful.

“Prosocial spending is immensely personal,” Dunn says. “The decision for prosocial spending should be made freely and is not something that should be pushed by a friend, family member, or coworker.”

Put another way, if you’re giving money to a cause because your boss encourages it, or because a family member asked you to, it’s less likely to provide the same rewards or gratification as giving to a cause you chose and find meaningful.

2. Give in Ways That Let You See the Impact of Your Gift

A gift will likely mean more if you can see its impact, Aknin says. An example might be donating to a local charity or organization, where you can see those dollars being spent on new services or resources in your community.

“The key is to find opportunities for prosocial spending that let you see how your generosity is impacting a cause you care about,” says Dunn.

3. Give to Causes You’re Socially Connected To

The best kind of charitable gift should involve some kind of social connection, Dunn says.

Dunn’s research has found that relatedness, or the quality of enhancing social bonds and connections, is another key aspect of prosocial spending most beneficial to the giver.

Giving to a community you’re part of is an example of relatedness, as is giving to a project or initiative that a close friend is involved with. Your gift not only benefits that cause, but it’s also meaningful to that friend.

The Takeaway

• Whether you can give a little or a lot, the decision to spend money on others seems to pay meaningful dividends.

• Charitable giving can boost happiness and life satisfaction and may even confer health benefits such as lower stress to the person giving.

• Donating to causes you choose and that allow you to see the positive impact of your gift increases your chances of finding giving personally beneficial.