Optimal Philanthropy for Human Beings


36


lukeprog

Summary: The psychology of charitable giving offers three pieces of advice to those who want to give charity and those who want to receive it: Enjoy the happiness that giving brings, commit future income, and realize that requesting time increases the odds of getting money.

One Saturday morning in 2009, an unknown couple walked into a diner, ate their breakfast, and paid their tab. They also paid the tab for some strangers at another table. 

And for the next five hours, dozens of customers got into the joy of giving and paid the favor forward.

This may sound like a movie, but it really happened.

But was it a fluke? Is the much-discussed link between happiness and charity real, or is it one of the 50 Great Myths of Popular Psychology invented to sell books that compete with The Secret?

Several studies suggest that giving does bring happiness. One study found that asking people to commit random acts of kindness can increase their happiness for weeks.1 And at the neurological level, giving money to charity activates the reward centers of the brain, the same ones activated by everything from cocaine to great art to an attractive face.2

Another study randomly assigned participants to spend money either on themselves or on others. As predicted, those who spent money helping others were happier at the end of the day.3

Other studies confirm that just as giving brings happiness, happiness brings giving. A 1972 study showed that people are more likely to help others if they have recently been put in a good mood by receiving a cookie or finding a dime left in a payphone.4 People are also more likely to help after they read something pleasant,5 or when they are made to feel competent at something.6

In fact, deriving happiness from giving may be a human universal.7 Data from 136 countries shows that spending money to help others is correlated with happiness.8

But correlation does not imply causation. To test for causation, researchers randomly assigned participants from two very different cultures (Canada and Uganda) to write about a time when they had spent money on themselves (personal spending) or others (prosocial spending). Participants were asked to report the happiness levels before and after the writing exercise. As predicted, those who wrote (and thought) about a time when they had engaged in prosocial spending saw greater increases in happiness than those who wrote about a time when they spent money on themselves.

So does happiness run in a circular motion?

This, too, has been tested. In one study,9 researchers asked each subject to describe the last time they spent either $20 or $100 on themselves or on someone else. Next, researchers had each participant report their level of happiness, and then predict which future spending behavior ($5 or $20, on themselves or others) would make them happiest.

Subjects assigned to recall prosocial spending reported being happier than those assigned to recall personal spending. Moreover, this reported happiness predicted the future spending choice, but neither the purchase amount nor the purchasing target (oneself or others) did. So happiness and giving do seem to reinforce each other.

So, should charities remind people that donating will make them happy?

This, alas, has not been tested. But for now we might guess that just as people generally do things they believe will make them happier, they will probably give more if persuaded by the (ample) evidence that generosity brings happiness.

Lessons for optimal philanthropists: Read the studies showing that giving brings happiness. (Check the footnotes below.) Pick out an optimal charity in advance, notice when you're happy, and decide to give them money right then.

Lessons for optimal charities: Teach your donors how to be happy. Remind them that generosity begets happiness.

 

Precommitment

Ulysses did not get past the beautiful but dangerous Sirens with sheer willpower. Rather, he knew his weaknesses and precommitted to sail past the Sirens. He tied himself to his ship's mast.

We all know the power of precommitment. Though many gym memberships remain unused, people do spend more time at the gym if they purchase a gym membership than if they pay per visit.10 Can precommitment work for giving to charity, too?

Yes, it can. In one study, donors were asked to increase their monthly contributions either immediately or two months in the future. One year later, the increase in donations was 32% higher for the group asked to precommit, and donor cancellation rates were identical (and very low) in both groups.11

Does it matter whether a charitable person precommits to donate money they already have vs. money they don't have yet?

Apparently it does. In one experiment, participants were entered into a raffle, with a chance to win $25. Participants had to decide in advance whether to donate the money to United Way or receive it in cash. Nearly 40% of the participants opted to precommit the potential winnings to charity. In another experiment, researchers asked subjects to imagine they had just won the lottery. Then, some were asked to donate some of their 'winnings' immediately, while others were asked to donate their 'winnings' in two months. Surprisingly, those asked to donate current 'winnings' later actually gave less.12

This suggests that pledging to donate current earnings later may be less motivating than donating current earnings now, while pledging to donate future earnings later should work well. (Of course, money is fungible. The donated $100 might as well be from today's paycheck as from the next one. But charities should frame requests for precommitment in terms of future earnings, like Giving What We Can does.)

Precommitment seems to work best when it creates psychological distance between donors and their money.13 The United Way allows donors to give via paycheck donations; because donors never feel like they have that money, they never face the pain of parting with it.

The same principle may explain the success of affinity credit cards. Affinity cards allow consumers to precommit their reward points to benefit a chosen charity. Donors never experience the pain of parting with other things that reward points could otherwise purchase (flights, etc.). As an aspiring optimal philanthropist, I use an affinity card that gives 1%-10% cash back to the Singularity Institute (plus $50 per new card signup). As a lazy optimal philanthropist, I'm glad it took me only four minutes to sign up.

Lessons for optimal philanthropists: Precommit. Use paycheck deduction and affinity cards to give money. Pledge future earnings.

Lessons for optimal charities: Ask donors to precommit to donate future earnings. Offer an affinity card. Offer paycheck deduction donations if possible.

 

Time vs. Money

In one creative study, researchers asked subjects to read some information about a fictional non-profit, the "American Lung Cancer Association." Subjects were then told that this organization was holding a fundraising event. Half the subjects were asked how much time they would like to donate (a time-ask). The other subjects were not asked about volunteering their time. Next, both groups were asked how much money they would like to donate (a money-ask). Those who first got a time-ask gave more money when asked for money ($36.44 vs. $24.46). Asking donors for time resulted in them giving more money!

Researchers also conducted a field experiment by partnering with HopeLab, a Bay Area charity that aims to improve the quality of life for children with chronic illnesses. A researcher representing HopeLab visited college campuses and waited outside a classroom full of students. When the students emerged, the researcher asked them individually whether they were willing to take part in a 30-minute study in exchange for $10.

Those who agreed read an introduction to HopeLab. Then, a third of them were asked how much they would like to give time to HopeLab, another third were asked how much they would like to donate to HopeLab, and a control group was asked no questions. Finally, all groups were asked their impressions of HopeLab, along with 20 minutes of filler questions.

When exiting the study, participants encountered the researcher (representing HopeLab) next to a box labeled 'HopeLab Donations.' The researcher paid each participant with ten $1 bills and gave them a flyer with details about volunteering for HopeLab. Researchers tracked the amount donated and which participants volunteered during the next month.

Subjects in the time-ask-first condition were the most generous, donating $5.85 of their $10, compared to $4.42 for those in the no-ask condition and $3.07 for those in the money-ask-first condition. Subjects in the time-ask-first condition also volunteered the most (7% gave time, averaging 6.5 hours), compared to those in the money-ask-first condition and the no-ask condition (1.6% each).14

Why do we see this 'Time-Ask Effect'? Perhaps it is because thinking about spending time on something activates a mindset of emotional meaning and satisfaction, allowing a donor to connect emotionally with a charity, whereas thinking about spending money activates a purely instrumental mindset.15 Whatever the reason, asking for time before money may result in more of both.

Lessons for optimal philanthropists: Volunteer your time to an optimal charity. You may soon find yourself giving time and money.

Lessons for optimal charities: Ask supporters for time before you ask them for money.

 

Multiplying Your Impact

Optimal philanthropy is a new but obvious idea. Spreading the meme at this early stage is a fairly optimal act in itself. 

Giving to optimal charities instead of average charities can multiply one person's impact 10, 100, or maybe 1000 times. Now multiply that change in impact by a hundred, thousand, or million people who have been persuaded by the simple math and equipped with the psychology of giving.16

That's a big impact.

So, contact me at OptimalPhilanthropy@gmail.com and precommit some of your time to working with a network of people to spread the meme of optimal philanthropy. :)

Or if you haven't got time for email, sign up for an affinity card.

The world thanks you.

 

 

 

Notes

1 Lyubomirsky et al. (2004).

2 Harbaugh et al. (2007).

3 Dunn et al. (2008).

4 Isen & Levin (1972).

5 Aderman (1972).

6 Harris & Huang (1973); Kazdin & Bryan (1971).

7 On human universals, see Norenzayan & Heine (2005).

8 Aknin et al. (2010).

9 Anik et al. (2010).

10 Della Vigna & Malmendier (2006); Gourville & Soman (1998).

11 Breman (2006).

12 Meyvis et al. (2010).

13 Meyvis et al. (2010). See the work on construal level theory: Trope & Liberman (2003); Liberman et al. (2007).

14 Liu & Aaker (2008).

15 Liu (2010).

16 For overviews, see Oppenheimer & Olivola (2010); Andreoni (2006); Bekkers & Wiepking (2007); Small & Simonsohn (2008); Reed et al. (2007).

  

References

Aderman (1972). Elation, depression, and helping behavior. Journal of Personality and Social Psychology, 24: 91-101.

Aknin, Barrington-Leigh, Dunn, Helliwell, Biswas-Diener, Kemeza, Nyende, Ashton-James, & Norton (2010). Prosocial spending and well-being: cross-cultural evidence for a psychological universal? NBER Working Paper 16415. National Bureau of Economic Research.

Andreoni (2006). Philanthropy. In Kolm & Ythier (eds.), Handbook of the Economics of Giving, Altruism, and Reciprocity, Vol. 2 (pp. 1201-1269). North Holland.

Anik, Aknin, Norton, & Dunn (2010). Feeling good about giving: The benefits (and costs) of self-interested charitable behavior. In Oppenheimer & Olivola (eds.), The Science of Giving: Experimental Approaches to the Study of Charity (pp. 3-14). Psychology Press.

Armstrong, Carpenter, & Hojnacki (2006). Whose deaths matter? Mortality, advocacy, and attention to disease in the mass media. Journal of Health Politics, Policy and Law, 31: 779-772.

Bekkers & Wiepking (2007). Generosity and philanthropy: A literature review.

Bremen (2006). Give More Tomorrow: A Field Experiment on Intertemporal Choice in Charitable Giving. Working paper, Stockholm School of Economics.

Della Vigna & Malmendier (2006). Paying not to go to the gymAmerican Economic Review, 96: 694–719.

Dunn, Aknin, & Norton (2008). Spending money on others promotes happiness. Science, 319: 1687-1688.

Eisensee & Stromberg (2007). News floods, news droughts, and U.S. disaster relief. Quarterly Journal of Economics, 122: 693-728.

Gourville & Soman (1998). Payment depreciation: The behavioral effects of temporally separating payments from consumption. Journal of Consumer Research, 25: 160-174.

Harbaugh, Mayr, & Burghart (2007). Neural responses to taxation and voluntary giving reveal motives for charitable donations. Science, 316: 1622-1625.

Harris & Huang (1973). Helping and the attribution process. Journal of Social Psychology, 90: 291-297.

Isen & Levin (1972). The effect of feeling good on helping: Cookies and kindness. Journal of Personality and Social Psychology, 21: 384-388.

Kazdin & Bryan (1971). Competence and volunteering. Journal of Experimental Social Psychology, 7: 87-97.

Liberman, Trope, & Stephan (2007). Psychological distance. In Kruglanski & Higgins (eds.), Social Psychology: Handbook of Basic Principles, 2nd edition. Guilford Press.

Liu & Aaker (2008). The happiness of giving: The time-ask effect. Journal of Consumer Research, 35: 543-547.

Liu (2010). The benefits of asking for time. In Oppenheimer & Olivola (eds.), The Science of Giving: Experimental Approaches to the Study of Charity (pp. 201-214). Psychology Press.

Lyubomirsky, Tkach, & Sheldon (2004). Pursuing sustained happiness through random acts of kindness and counting one's blessings: Tests of two six-week interventions. Unpublished data, Department of Psychology, University of California, Riverside.

Meyvis, Bennett, & Oppenheimer (2010). Precommitment to charity. In Oppenheimer & Olivola (eds.), The Science of Giving: Experimental Approaches to the Study of Charity (pp. 35-48). Psychology Press.

Norenzayan & Heine (2005). Psychological universals: What are they and how can we know? Psychological Bulletin, 131: 763-784.

Oppenheimer & Olivola, eds. (2010). The Science of Giving: Experimental Approaches to the Study of Charity. Psychology Press.

Reed, Aquino, & Levy (2007). Moral identity and judgments of charitable behaviors. Journal of Marketing, 71: 178-193.

Slovic (2007). 'If I look at the mass I will never act': Psychic numbing and genocide. Judgment and Decision Making, 2: 79-95.

Small & Simonsohn (2008). Friends of victims: Personal experience and prosocial behavior. Journal of Consumer Research, 35: 532-542.

Trope & Liberman (2003). Temporal construal. Psychological Review, 110: 403-421.