Working Up

by Dwayne Phillips

There is a difference between gifts and contracts. Givers often confuse the two.

I just read several blog posts and comments about giving money to “poor” people only to see them half an hour later buying lottery tickets with the money. They givers were incensed as the poor had promised to buy food and necessities with the money.

Hence, we address a gift (one definition):

Property, money or asset that one person transfers to another while receiving nothing in return.

The “while receiving nothing in return” part is oft forgotten and takes many forms. In the example above, the giver expected honesty in return and was incensed when honesty wasn’t returned. I have seen many similar examples where the giver was incensed that the receiver used the money not for lottery tickets, but for things the giver deemed unworthy. I have even seen givers incensed when the receiver in turn gave some of the money to other less-fortunate people instead of spending it on themselves.

Now we move from a gift to a contract (same source):

An agreement between two or more parties for the doing or not doing of something specified.

Here we clearly have the “doing or not doing of something specified.”

Continuing the first example, “I am giving you this money to buy food for your kids.” That is not a gift, it is a contract. The money is transferred for the expressed purpose of buying food for kids.

Continuing the second example, “I am giving you this money to spend on yourself.” Again, that is not a gift, it is a contract as the money is transferred for the expressed purpose of the receiver spending it only on the receiver.

Once a person gives something to another (gives, not contracts), the receiver has total control over it. If the giver expects to have any control or expects to receive anything in return, even love or adoration, we do not have a gift. Instead, we have a contract.

There is nothing wrong with contracts. They work quite well in many instances. There is nothing wrong with me giving, er I mean me contracting with, my son for he and his wife to take a vacation with money I transfer to him. That will work just fine. He doesn’t have to accept the transfer and take the vacation I specify. He can negotiate with me about the amount of funds and the vacation destination. Either of us can decline the contract at any time. And so it goes with contracts.

Understanding the difference between gifts and contracts is quite liberating. It can also be insulting to some people, so take care.