I’m giving to you, but partly for me
What drives people to charitable giving?
For decades, economists and social scientists have wondered why people give to charity — i.e., why they take their hard earned money and spend it to help someone they have never met. It turns out there are many reasons people do this. One is pure altruism — people genuinely care about others and are happier the happier other people are. Other reasons matter more for the donor than the recipient: people feel happier when they give, they get social status from giving, and they find it difficult to refuse requests to give whether they want to or not. So how much of giving is about the recipient and how much is about the donor?
Using Spare, a platform created by Busara to explore questions about charitable giving, we set out to answer this question. Spare’s web app enables donors to send cash transfers to people living on less than $2 per day in Kenya, in real time (it takes about a minute for the recipient to receive the donation). Using the app to make donations, we asked donors three questions. First, how much would they pay to deliver a donation to a recipient made by someone else today rather than in the future. Second, how much would they pay to make a donation to a recipient today rather than in the future. Third, how much would they pay to make a donation to Spare today, even though the donation would not be sent to the recipient until a time in the future.
The first question allows us to measure how strong the altruistic motivation is, since it measures how much a person will pay to benefit someone else even though they did not cause the person to benefit personally. The second two questions allow us to measure how much pleasure someone gets from making a donation themselves, and how much of that is just the act of giving versus their gift having a positive impact any time soon.
We found that the strongest motivations for giving are pure altruism and the joy that people get just by giving (which could be simply that, or through some other mechanism like the recognition they get for being a generous person). Moreover, these two motivations are roughly equally important in driving donations. This average, however, masks a lot of variation across people — about 20% of people are pure altruists, and some care a lot about the ‘warm glow’ from giving while others care very little.
Our study also allowed us to explore how impatient people are to give and compare that to how impatient they are for their gift to actually have an impact. This matters because there is usually a time lag between when someone donates to charity and when the charity is actually able to do good work with the funds. We found that people are much more impatient to give and feel good about giving than they are for their gift to have a positive impact. This creates a risk that donors will not monitor charities enough and encourage them to be efficient in their work.
The results of this study have some practical implications for NGOs and other fundraisers. First, people are driven by altruistic motives and by feeling good about their donation. So fundraising campaigns that appeal to either the impact of the gift, or what a good deed the donor is doing are likely to be equally effective. Marketing is not a one-size-fits-all proposition, however, as donors are very heterogeneous in what they care about: having a variety of messages that appeal to various motivations will likely capture the greatest number of donors. Because donors get a lot of satisfaction from giving itself, making the giving experience more enjoyable might increase giving (we would love to see Spare integrated into online games or other ways to make giving more fun for donors). Finally, though donors are most impatient to give, they are also willing to pay more to have their gifts achieve impact soon, so charities that can efficiently create results and communicate them to donors will be rewarded.
