Buy happiness—by giving your money away

Next time you’re feeling stressed, try giving some money away.

Generosity is a powerful drug even in small doses. Donations to a worthy cause or acts of kindness to friends give your mind and body a boost.

Yes, the side effects of a charitable act may include a better mood, lower blood pressure and a longer life, according to studies from brain scientists and economists. You might experience a spike in serotonin and dopamine, hormones associated with happiness, and a drop in cortisol, researchers say. (You also get some tax benefits.)

Before you start using your checkbook as a prescription pad, there is one caveat. How you give money and time matters more than how much, says Sara Konrath, a social psychologist leading a research lab at the Indiana University Lilly Family School of Philanthropy.

Here’s the formula to getting the best return on giving:

1. Give a damn

Generosity works best when you mean it. You won’t feel the same high if you were guilted into giving by your Aunt Linda. You’ll feel 10% more satisfied giving a voluntary donation than when it is an obligation, a 2007 study from the University of Oregon found.

When you’re genuinely excited about the gift, the good feelings linger. A study by the University of Chicago Booth School of Business found that the joy of making a $5 gift lasted five days, while the effect of the more self-serving “retail therapy" faded much faster.

“People experience a kind of ‘giver’s high’ that lasts longer than the fleeting pleasure of personal spending," says Lara Aknin, a psychologist studying well-being and social relationships.

2. Follow the money

Acts of charity are more rewarding when we can see the impact of our gifts. You will feel a deeper connection if you watch how your donation is used. Charities that send regular impact updates see more engaged, generous donors.

When the local food bank shares how your $100 donation helped provide lunches for 20 children, you’re more likely to give again.

“The more obvious it is that your gift has directly helped, the better you’ll feel," Aknin says.

3. Unsubscribe

Charities are pushing the Netflix model: They ask you to sign up for recurring donations. Such subscriptions may be good for fundraising, but they reduce your direct connection with the gift. Donors might miss the emotional reward, says Susan Gilmartin, chief marketing officer of Momentive Software, which provides software to thousands of nonprofits.

So give actively, not automatically. And save recurring payments for obligations like your rent or phone bill.

4. Give time

While cash donations have clear benefits, volunteering your time can do even more for your health, well-being and relationships than money.

Two hours of weekly volunteer work is enough to lower your stress, a study led by the sociology department at Georgia State University found. It is also enough to provide a greater sense of purpose.

“Volunteering can build resilience, helping people feel more in control and less reactive to daily stresses," says Aknin.

When it comes to giving, if it is from the heart, you’ll feel the difference.

Write to Dalvin Brown at dalvin.brown@wsj.com