Donations and Visible Peer Pressure

I have never been super comfortable with fund raiser activities, but there is a reason we go through so much effort with fundraising when we are parts of groups, organizations, and cash-strapped clubs. “Up to 95% of all donations are given in response to a solicitation,” write Kevin Simler and Robin Hanson in The Elephant in the Brain┬áciting a 2005 literature review by Rene Bekkers. We don’t part with our money on a whim (when it comes to donations) and we prefer to wait until someone asks us for money. The authors describe why by writing, “By helping donors advertise their generosity, charities incentivize more donations.” Having another person directly ask for money ensures that at least one other person will see the donor’s charitable action and be aware of how generous they are.

 

In the quotes from Hanson and Simler we see two factors from my post yesterday that influence whether or not we make donations: visibility and peer pressure.

 

When I am grocery shopping by myself, I have no problem saying no to scouts or charity groups soliciting donations as the door or to cashier/checkout prompts for donations to certain causes. When I am with my wife, however, it is always a little harder to say no because I don’t want someone I care about to see me as heartless and inconsiderate. Most of the time I have no way to know if the charity is effective, if the person collecting the donation is reliably going to give my donation to the charity, or how much need there really is for my donation. I am simply stopped in my tracks and asked to make a donation, even if it is a small and ultimately meaningless donation.

 

To me, it often doesn’t feel as though I am being asked for money, but that I am being asked to signal my virtue as a generous person.

 

It is easy for us to say no when no one will see us, but when our act is visible and when another person directly appeals to us, it is hard to say no. We end up feeling guilty if we don’t make a token donation.

 

If our charitable activity was more about helping those in need and doing good in the world, we would not have these constant virtue tests at local grocery stores. We also wouldn’t have bricks bearing our names at the places we back with our donations. We would not have platinum, gold, and silver sponsors at charity events and open charity auctions would not happen.

 

Our donations are often about doing something good to support a meaningful cause, but they are also often about making sure people know we are the kind of people who donate to nice sounding causes. Our donations are a way to show our virtue, even if our donation is effectively a throwaway. We donate more when people know we donate, and rather than actively giving away our resources we wait until we are asked by someone else, guaranteeing that at least one other person knows how good we are. To really make a difference with our charity, however, we should seek out automatic ways to make donations that have a big impact. Our name can still be attached, but we should at least make sure we donate not because we will feel guilty by not donating, but because we want to direct our money to the place where it will make the biggest impact.