Many of us plan our giving and think through our decisions to donate, but research shows that doing so might actually cause us to give less.
Years ago, I read an article in the Boston Globe about research being done on the reasons people give and motivating them to give more. This week, 10 years later, I found an update and new insights.
“What we find is when people are thinking more deliberatively … they end up being less generous overall ” said Deborah Small, associate professor of marketing and psychology at the University of Pennsylvania’s Wharton School.
Is it possible to be both generous and smart about it?
A lot of donors would like to think so, but new research suggests that it may be harder than we realize. And while there may be things we can do to make sure our money doesn’t end up wasted charity there appears to be one area where we have to be extra-careful not to let our brains get in the way.
Not only does deliberating about our giving tend to affect the amount, but other research probing the impact of matching gifts was interesting. It is less than expected.
This conclusion is bolstered by the findings of John List, an economist at the University of Chicago who tested the effectiveness of so-called matching programs in which a major supporter agrees to match the contributions of individual donors. List expected to find that matching programs enticed people to give by creating the (correct) impression that their money would go further.
But List’s results were curious: While charities that offered a matching program did inspire more people to give than charities that didn’t, he was surprised to find that a higher matching ratio didn’t lead to larger donations. People whose donations would be quadrupled — a huge increase in the power of their gift — didn’t donate any more money than people whose donations would simply be doubled. “People get utility or satisfaction out of giving to a good cause. And they do not care how much public good is provided,” List said.
Deborah Small also found that more information about an issue or an organization had a negative effect on giving. She conducted research with Paul Slovic of the University of Oregon and George Loewenstein of Carnegie Mellon University, which showed that the more facts and data people were given about a problem a charity was trying to eradicate, the less likely they were to give to it. “It’s all about putting together a simple, emotionally compelling message,” Small says. “The best way to do that is in the form of a picture or a story, something that purely engages the emotional system.
The mistake that many charities make is trying to appeal to both emotion and reason.
They assume this would be more effective than appealing to only one or the other, but it isn’t.” The best approach for raising money to feed hungry children in Mali, her team discovered, was to show potential givers a picture of a starving child, along with her name and age. When provided with more information about famine in Africa, potential donors were actually less likely to give. She concluded that, as people think more deeply about a situation on a broad scale, they realize how little their contribution can help. This “drop in the bucket” effect happens when people start thinking about the people they will not be able to help, which makes the act of giving less satisfying.
The factors considered for a wise financial decision aren’t always applied to giving decisions.
Small also studied the effects of providing effectiveness ratings for organizations. People were given a rating scale of charities with higher scores, indicating this charity does more good than others. “We made it really easy for participants in the study to get the answer right – and they just don’t, for the most part, use that information. I think what we learned is they just don’t see that information as relevant for this type of decision. They see it as very relevant for a decision between financial investments, but not so relevant for this charity decision.”
Finally, she discovered that charities must be very careful how they present their impact information. If you are very specific about the “unit cost” of, say, a mosquito net, or a pair of shoes or pair of eyeglasses, people will tend to give exactly that amount. If a mosquito net costs $1, donors tend to give $1. If it costs 50 cents, they give 50 cents. As a result, when the cost of the malaria net is cheaper, they’re actually giving less.
I keep a card on my desk with a quote from Edmund Burke to remind me of my commitment to giving – whatever the amounts or the impact will be:
“Nobody makes a greater mistake than he who did nothing because he could only do a little.”
All the schemes and plans to influence our giving eventually fall in on themselves and we are left, thankfully, with the one reason that outlasts them all: gratitude to God.
To learn more about the study cited above, read the original article published by the University of Pennsylvania.