(Illustration by Adam McCauley)
When people consider giving money to charity, how should they make their decisions? Should they put more weight on objective factors, such as the effectiveness of the nonprofit in question? Or should subjective preferences, such as passion for a cause or a personal connection, determine one’s choice?
In a new paper, Jonathan Berman of London Business School, Alixandra Barasch of the New York University Stern School of Business, Emma Levine of the University of Chicago Booth School of Business, and Deborah Small at the University of Pennsylvania’s Wharton School examine how we think about charitable giving. The researchers’ concerns emerge from recent debates about effective altruism, a movement inspired by utilitarian philosophy that advocates for people to make charitable donations to the programs or organizations that will produce the most social welfare from the money donated. The paper examines the extent to which people think the relative effectiveness of a charity should determine whether they should give money to it, instead of other organizations.
“I wondered, if there were a way to give people information about how effective charities are, would they use or discount the information?” Berman says. Organizations such as GiveWell are dedicated to promoting charities that demonstrate effectiveness.
The study consisted of five experiments using participants drawn from university
behavior-lab pools and online-task marketplaces. The first two experiments established that people think the decision to donate to charity is relatively subjective and comparable with other personal decisions, and that people think it appropriate for charitable givers to prefer charities or causes with which they have an emotional connection. In further experiments, the researchers found that subjects were more likely to favor maximizing welfare on the basis of effectiveness when they were investing money, rather than choosing a charity. Subjects were also less likely to give themselves permission to choose the option that didn’t maximize welfare when they felt they were responsible for the consequences of such a decision; they felt the same if another person was responsible.
The research points to a shortcoming in the view of some effective altruists that charitable givers fail to maximize welfare because they make mistakes or lack the right information. While people are willing to use effectiveness as a criterion to decide between different charities devoted to the same cause, they eschew this when faced with a decision about different types of charities and causes. Rather than being “distorted altruists,” such givers are making a normatively appropriate choice to think subjectively about their donations, study participants thought. According to the studies, donors feel that consulting quantitative data on the charity’s impact isn’t necessary when people are choosing between charities devoted to different causes—one supporting cancer research and another supporting animal welfare, for instance.
“In contrast, the current research shows that the benefits of comparing charity effectiveness are limited when causes vary by type, as people often believe that it is more important to choose an option that they emotionally connect with rather than an option that does the most good,” the researchers write. If you are partial to cats, you may choose to support a cat shelter even if you’re shown data indicating that a dog shelter does a better job of helping dogs (or saving animals overall) than the cat shelter does of helping cats. That may not be what you ought to do, according to effective altruists, but people generally do not share this view.
Because the study shows that people think that choosing which charity to support is subjective, not objective, giving them more information on charities’ effectiveness won’t solve the problem of donors giving to ineffective charities, the researchers find.
“Our results suggest that people view charity decisions as being relatively subjective, which inhibits the impact of effectiveness information on welfare maximization,” they write. To get people to choose the option that provides the greatest social welfare, more information may not help, the researchers write. “Rather, it may require altering how individuals view their role as a donor altogether,” they write.
Read more stories by Chana R. Schoenberger.