Do people donate to charities because altruism makes them feel good about themselves, or because of social pressure to donate? It matters because altruistically motivated giving benefits both the giver and the charity, since the giver enjoys giving, while social pressure motivated giving benefits only the charity. A new study from Stefano DellaVigna, John List, and Ulrike Malmendier uses a randomized field experiment and a structural model to estimate the extent to which giving to door-to-door charities is motivated by each:
We find evidence that both altruism and social pressure affect door-to-door charitable giving. We estimate that about half of donors would prefer not to be contacted by the fund- raiser either because they would prefer not to donate, or because they would prefer to donate less. We estimate a social pressure cost of turning down a giving request of $1 to $4, depending on the type of charity…. On average, we estimate the welfare effect of the door-to-door campaigns in our sample to be negative.
If their study is taken to be representative of door-to-door fundraisers, the authors claim that the welfare loss incurred by those being solicited for donation is in the hundreds of millions of dollars. Do we need a pigouvian tax for door-to-door charities?
5 comments
Comments feed for this article
Thursday ~ April 1st, 2010 at 9:12 pm
Rick Russell
Door-to-door charity collection, cold-call charity collection and shopping center/shopping mall collection are extremely disturbing, IMO.
Putting aside the more horrific cases where elderly or infirm people are threatened or bullied into “donation”, there is no way to verify that the person at your doorstep or on the phone is working for any kind of legitimate charitable cause. Organizations like “The Family” ( http://en.wikipedia.org/wiki/Family_International and elsewhere) routinely lie to obtain donations, claiming to collect for legitimate charities, presenting fake paperwork to doubtful targets, sometimes even wearing elaborate Salvation Army-style uniforms in an attempt to confuse the mark.
Cold-callers are just as bad, often using names that are deceptively similar to real charities in an attempt to confuse the target. I “pledged” some money to a policeman’s beneficial association many years ago, only to find (thanks to the then-new Internet) that they were not a 501(c)3 charitable organization — they just sounded alot like a legitimate one.
When I called them up to let them know I was returning their packet and that I would not be paying them, the conversation took a strange turn — essentially, they started slyly threatening me, asking “do you care about your family’s safety?” and “don’t you realize that the police in depend on charitable donations to do good work in the community of ? How do you think the police in would feel knowing that did not contribute?”
I think that if one included the cost of these overtly deceptive and forceful (but technically legal) components of charity panhandling, the effective welfare cost would go way up.
Anyway, enough ranting. If a charity wants to collect donations on the street — pass out a card with the vitals, including a pledge form and links to the Web site, engage me to talk about the work of the charity, etc. — that’s great. I’ll take the card, and in all likelihood I will follow up since they showed respect for my time and personal space.
If they demand a $5 bill, forget it. They will not get 2 seconds of my time.
Friday ~ April 2nd, 2010 at 2:21 pm
Rick Russell
Sorry, I used pointy brackets for emphasis and the system tried to interpret them as tags.
I meant to say:
they started slyly threatening me, asking “do you care about your family’s safety?” and “don’t you realize that the police in {your town} depend on charitable donations to do good work in the community of {your town} ? How do you think the police in {your town} would feel knowing that you did not contribute?”
Saturday ~ April 3rd, 2010 at 9:16 pm
jazzbumpa
The study you cite is, at best, only marginally connected to the question you ask in your initial sentence.
Frex: I will not under any circumstances give to anyone who comes to my door or calls me on the phone.
What do you now know about my altruism, or indeed , willingness to give to anyone or anything else for any reason?
Absolutely nothing.
Cheers!
JzB
Sunday ~ April 4th, 2010 at 8:46 pm
Adam Ozimek
My initial sentence: “Do people donate to charities because altruism makes them feel good about themselves, or because of social pressure to donate?”
The authors of the paper: “We present a theoretical framework that distinguishes two types of motivation: individuals like to give, e.g., due to altruism or warm glow, and individuals would rather not give but dislike saying no, e.g., due to social pressure.”
Sounds pretty connected to me.
Sunday ~ April 4th, 2010 at 7:53 pm
Simoleon Sense » Blog Archive » Weekly Roundup #72 -The Smartest Linkfest On The Web!
[...] Why do people give to charity? So you’ll get out of their faces – via Modeled Behavior – Do people donate to charities because altruism makes them feel good about themselves, or because of social pressure to donate? It matters because altruistically motivated giving benefits both the giver and the charity, since the giver enjoys giving, while social pressure motivated giving benefits only the charity. A new study from Stefano DellaVigna, John List, and Ulrike Malmendier uses a randomized field experiment and a structural model to estimate the extent to which giving to door-to-door charities is motivated by each [...]