What Makes Americans Part with Cash Today

Tuesday, January 8th, 2013 By

What makes people give to charity?

Cash today is hard to come by and no one knows it better than charities and non-profits. These organizations work hard to bring in donations and with the economy in a slump, it’s been difficult for them to generate the needed funds to continue operating.

Researchers are honing in on what makes people give and that’s providing organizations some real insight in what directs large and small donations. Questions like, “What can spur a donation?” and “How do consumers decide how much to donate?” are being explored scientifically. Here are some answers.

The scientific approach to giving

First of all, researchers noted that donating, for the most part, is a “wholly irrational act.” They say this because other than a potential tax deduction, there is no objectively discernible benefit to the consumer. There is some altruism in the mix, but altruism turns out to be less of a decision-making factor than one would think. Research is showing that most people donate to boost social status,  improve self-image, alleivate guilt, or some combination thereof

The other interesting factor of giving is that the bigger the problem, the less likely Americans are to give. Researchers say this is because when a problem is particularly overwhelming, people’s brains shut down. Professor Paul Slovic, a pioneer in charity research, was recently quoted in an MSN Money article as saying, “What really moves people is making an emotional connection. The numbers not only don’t convey feeling, they actually get in the way of feeling.”

So what makes people give

The science of giving is an intricate study. Slovic put together a research team and a host of subjects to answer difficult questions. He identified four main reasons why people give to charity.

1. People give to get. Research is showing that giving is more of a self-centered act than most people would like to think. For example, when it comes to alumni donations, the amount of donation directly correlates to how likely the alumni’s children are to go to the school in question.

2. People give to get indirectly. There is also an indirect benefit to giving to charity. Cash today is considered a sign of social status, and that includes charitable contributions. Slovic’s study found that people were more likely to give if in exchange they receive some type of public recognition. For example, people will donate higher amounts when they are informed that donors are separated into giving “levels” based on their amounts. The study also found that “anonymous donations” are increasingly rare these days.

3. People give to feel good. The study also noted that people, in general, have little regard for the effectiveness of their donations. The decision to give is much more self-centered and questions like, “Where is my money going? And “How will it reach the intended purpose?” are often not entertained in any depth by the giver.

4. People give to rid themselves of guilt. Alleviation of guilt is another big goal in giving. Slovic said, “People need to feel good about themselves and a good portion of that comes from engaging in good deeds.” Part of the research study required subjects to write about themselves. After their task was finished, they were asked to donate to charity. The subjects who wrote positive things were less likely to donate more than requested. On the other hand, subjects with negative things to say about themselves donated much more than requested. Slovic added, “When moral identity is threatened, moral behavior is a means to regain some lost self-worth.”

Charities are looking for donations

In the end charitable donations are more self-centered than most would like to think. Since the recession, cash today is harder to find than ever. Charities and non-profit organizations are looking for ways to spur consumers into giving more generously. With studies like Slovic’s, hopefully they will be able to find out what makes people give, and create programs that encourage such generosity.

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