(Photo source: Catherine Lane)Giving to charity is the ultimate act of selflessness. We offer our own hard-earned money to those in need, with no thought of return. The reality of altruism, however, is much more complicated, as Harvard Business School Assistant Professor Christine L. Exley describes in a new working paper, The Better Is the Enemy of the Good.
In fact, Exley argues that based on her research, people look for any excuse to avoid giving a donation and then rationalize their skinflint behavior to avoid feeling selfish. Often those excuses come in the form of an uncertainty about how much good the donation will achieve.
“That gives you some moral wiggle room to pursue the more selfish action,” says Exley, an assistant professor in the Negotiation, Organizations & Markets Unit at HBS. Her research attempts to improve the performance of nonprofits by understanding motivations for prosocial behavior, such as volunteering and charitable giving.
These insights are important not only for nonprofits trying to motivate donors to give, but also for almost any company that wants to convince consumers the value of a particular retirement plan, diet, exercise regime, educational investment, or new technology. Fund solicitations providing only information without careful framing may be giving consumers an excuse to stay away because of what the product doesn’t have.
“People exaggerate a charity’s metrics to the extent that they use it as an excuse not to give at all”
In past research, Exley looked at the extent to which people believe their charity will succeed in its goals. She found that when individuals doubt the charity’s impact, or when the charity shows lower performance metrics, they are naturally less inclined to give. Exley also discovered that people overweight the risks, punishing the charity simply for not being perfect. “People exaggerate a charity’s metrics to the extent that they use it as an excuse not to give at all,” she says.
In her current study with Judd B. Kessler, a business economics and public policy professor at the Wharton School, Exley wanted to see how far people’s capacity for self-justification could be pushed—whether it held up in cases where there was no uncertainty at all.
“There are hundreds and thousands of charities out there, and choosing to give to one charity often involves choosing not to give to another,” Exley says. “We wanted to see if just making the notion salient that your donation could be better would be sufficient to trigger an excuse not to give at all.”
Using the online marketplace Amazon Mechanical Turk, Exley and Kessler set up an experiment whereby 1,600 participants were given the option to either donate $1.50 to the national charity Make-A-Wish Foundation, or donate various amounts of cents to a “bundle” of four Make-A-Wish state chapters. In almost all cases, participants sought to maximize their donation by choosing whichever option resulted in more money overall—choosing the national chapter unless the total amount in the bundle exceeded $1.50.
The researchers then varied the experiment, keeping the same amounts of money, but adding a fifth chapter to the bundle, assigning it zero cents. Just making it noticeable to participants that there were other chapters that were not receiving money—that their donation could have been better—increased the number of people choosing the national option by 7 percent.
I’ll take the money
Their next finding, however, was even more dramatic—or depending on how you look at it, more depressing. For a new variation on the experiment, participants were given the option of donating money to the bundle of state chapters, or keeping the funds for themselves. The researchers then repeated the experiment, offering the bundle of four chapters or five (with one getting zero).
Now they found a big jump, with 22 percent of participants more likely to keep the money for themselves when the zero was added.
“They are dealing with the same information,” says Exley, “so there is no reason for individuals to act differently, unless of course they are exploiting an excuse not to give.” After all, it’s not like people don’t know there are 46 other states that won’t be receiving funding—but just showing one of them made participants second-guess their desire to give at all.
“One very broad generalization is that regardless of how you present the information, if it’s anything less than perfect, individuals will find a way to manipulate the information in a way that benefits themselves,” says Exley. “That’s discouraging to economists; we think one of our primary tools is information.”
The lesson for nonprofits
That result may be discouraging to the nonprofit sector as well, suggesting that charities must be very careful in how they present information in order to offer it in the best light.
Rather than trying to change human behavior, however, Exley says that we may be able to encourage giving by tapping into other self-justifications.
In a new line of research, for example, Exley is looking at people’s need for consistency. “Individuals like to think of themselves as consistent, so can you construct a situation where that need ties their hands?” Just pointing out to people that they are willing to give to four charities, but not five, might be enough to sufficiently embarrass them into changing their mind.
“There are ways you can play up other motives such as a desire for consistency to counter people’s inherent selfishness,” Exley says. “I am more optimistic about that path than I am about simply providing information by itself.”
In other words, if people can justify any excuse not to give, then maybe they can also justify an excuse to give.
Related Reading:
Incentives for Prosocial Behavior: The Role of Reputations
Donors Are Turned Off by Overhead Costs. Here’s What Charities Can Do
People Have an Irrational Need to Complete 'Sets' of Things
What do you think?
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