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Jan 24, 2012

January Business First: Exploring the motivation behind giving

Inspiration for my January Business First column was taken from Leon Neyfakh’s fascinating piece in The Boston Globe. Neyfakh reviewed research on the motivation to donate to charity, providing a disturbing counter to those of us who believe analysis is always a good thing. Specifically, he argues that analysis blunts the impulse to give.

I started my column with an analogy,* “New research suggests that nonprofits are best viewed by donors as if they were an impressionist painting. One of the remarkable qualities of impressionism is that looking from a distance conveys more about the intrinsic value of the painting than looking at it closely. When examined from a few inches away, the viewer sees dabs of seemingly unrelated color with no clear image emerging. It is only from afar that one sees how all those dabs fit together and form an image of beauty and insight. So it seems for nonprofits.”

Neyfakh’s research is multifaceted, yet it seems to isolate the emotions that prompt giving from the impact of providing more information so that donors can make better choices. It seems that providing more information usually results in a decision to give less or not to give at all. Here is a sample of the research:

Some research suggests it is not altruism or a sense of concern for others that prompts us to give, but rather the sense of morality that we derive from the act. It provides us a satisfaction with our role in the world. The economist James Andreoni wrote, “The reason we give money is that it makes us feel good—regardless of how much it benefits the people we’re ostensibly trying to help.” Other research suggests that social pressure and the need to avoid the appearance of being compassion-less prompts much of our giving.

When provided with additional information, most donors could not be influenced to give more, according to a report on the appeal of online giving by Cygnus Applied Research. In fact, the additional information was found to influence donors into giving less or to stop giving altogether. Feel the tension between emotional and cognitive reasoning!

Further research has found that showing a photograph of a starving African child with her name and age prompted the most donors to give. But donors who were provided with more information about famine in Africa – more to think about – were less likely to give. Similarly, another study found that providing information about a nonprofit’s overhead costs dissuaded donors from giving.

I am an analytical person, so this type of research is troubling. But I think I can reconcile it. It certainly suggests that the majority of donors (not the 6 or 7-figure donors) would do well to avoid nonprofit data bases such as Guidestar, Power Philanthropy, or DonorsEdge.

On the other hand it does give some credence to the websites I most dislike: those which “rate” or “rank” nonprofits. I dislike them because I find their metrics and their ranking systems to be arbitrary and prone to emphasizing the wrong things. Two of the worst offenders are the Better Business Bureau and Charity Navigator.

And yet, both seem to have an impact on donor decisions in spite of the potential deterrent via analysis. Highlighting a set of charities from the overwhelming number that exist helps circumvent the possibility of a donor analyzing the nonprofit (the site has already done that for them!), and lets the emotional reasoning rule. Simple rankings or “Top Ten” lists are good examples of ways to shortcut the need to think.

University of Pittsburgh economist Lise Vesterlund likens the impulse to give to the temptation to eat. Eating is a temptation that can and should be indulged, but with certain restrictions. For example, it is best to indulge in carrots rather than chocolates.

In the same way, one can and should indulge in giving. However, it is best to indulge in the finest charities (the carrots). Her interpretation of the value of rankings is that they allow the giving temptation to be indulged by using favored lists to put the “carrots” closer at hand than the “chocolates.”

But this leaves me uncomfortable. Who gets to determine which nonprofits are carrots and which are chocolates?  And what is wrong with indulging in a chocolate from time to time?

A controversial topic indeed. What do you think about Neyfakh’s findings? Have you donated recently to get that “feel good” feeling? I’d love to hear some opinions from those that have worked directly in fundraising. Leave me a comment and we can get a great discussion started.

*those of you who are art experts must give me some slack