Why to donate to charities?

It is popularly said that everyone is equal in the world. But as popularly as it is said, this saying hardly stands true owing to the fact that the world is filled with social and status differences. There are so many people who still register with the poverty line and so many others who even earn lesser than the poverty line! And there are some who are far ahead from the word ‘poverty’.

Likewise, there is nothing wrong with being rich or poor. However, if the rich have the resources to help the poor and the under privileged, that can never hurt either of the parties! Likewise, here are some reasons stating why one should donate to a charity

1. Resolve the problem of poverty

You will agree that there are so many people who come below the poverty line! Likewise, several charities support these people who do not have the access to even meet the basic requirements of life. If you contribute to charities which support such people, you are pretty much making a contribution to help people fight the grave social injustice of poverty!
Imagine! your contribution to such charities can actually help the poor persons have an access to health care and clean water. They will be able to fight off life threatening diseases. Your contribution can be among one of many which will actually work together to provide medical facilities to these people when they have the need for it!

2. Small drops make a mighty ocean

This saying stands true especially when you want to collectively help a cause! As a single contributor, you might not have the resource to single handedly donate an amount which can completely resolve a single issue!
Likewise, if everyone thinks like that, no one would be making a contribution to the charity at all! In situations such as this, if every person makes donations of small amounts, the resource pool can actually become a big one! Therefore, small contributions from person to person can actually make a huge difference!
Instead of thinking that your amount is small, it is in fact better to keep making your donations whenever you have the time and the facility for it!

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3. Understand the world

Last but not the least, another reason why it is important to contribute to charity is to understand and feel the ways of the world! By donating your money or by contributing your efforts, you will be able to relate to these people who do not have the luxuries of life. This way, you can be aware of the way the world works and how your single contribution can multiply an change the inequalities and the differences that are so prevalent in our world!
You have to understand that a charity means to help the people who are needy. It cannot be forced upon any individual as there is no law to help others! The feeling has to come from within the individual!

Should your organization be debt free or not?

For a company, a debt can be defined as a form of borrowing from an outside party, which has to be eventually repaid. And no debt comes only with the principle amount to be repaid. An added interest is to be paid back with that! A big amount with an added interest is never desirable!
Likewise, let us see whether an organization should remain debt free or not?
The Pros of being debt free

1. If a company is debt free, the stakeholders will be happier. Take for instance the employees; an employee would happily work for a debt free company. This is for the reason that there is a greater amount of stability and job security for the employee if a company is debt free.
Likewise, the board of management for a company would also like to work for a debt free company. Again this is for the simple fact that a debt free company is where the board of management can experiment with their decisions and take a chance. Now isn’t this a major factor in the pros of working in a debt free company!

2. Another important factor for keeping a business entity debt free is that there is the factor of interest. With the debt amounts of a business entity already being in huge sums, the high rates of interest help in no way to encourage taking the debt! Accordingly, the management takes no debt, it translates to no interest!

3. Not only the above, being debt free, ensures a company with being stable in the future. This is for the reason that taking a debt would mean that the company has probably given some sort of security to the lender. This may even be a mortgage of the company facilities or the company assets! Therefore, a non repayment of the debt would mean that the assets are no longer the company’s!

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The Cons of being debt free

Unhappy shareholders

This is probably the most major disadvantage for a company if it decides to go debt free. This is for the simple reason that if a company does not take debt at all to run its current operations; it is not going to have a good enough return to give back to its shareholders. In fact, a company might not be able to pay its shareholders for quite a while as it will not have sufficient savings to both run the business and pay the shareholders!

All in all, it is absolutely fine for a company to take a debt for running its business. However, the management needs to ensure that whatever the debt interest rate is, the rate of earnings are higher so that the debt interest can be well covered! Therefore, if there is no savings from the previous year’s cash flows, there should be no hesitation to take a financing option from the market. The only back up for the debt should be the rate of income for the business!

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