Charity, Parochialism, and the Inefficiencies of Altruism
Most of us are good and charitable people. Whether it is pure altruism, the good feeling we get, or just a matter of doing it because others do, many of us have a desire to give to charity in some form or another (Brooks, 2007). Last year in the United Kingdom for example, people donated around £9.7 billion to charity (CAF, 2017), with medical research being the most popular cause with 26% of total donations, and overseas aid and disaster relief getting 19%.
However, is this money going to the right places? Whilst there has been an increasing amount of research and attention given to the behavioral science of giving (BIT, 2013), the issue of why we specifically donate our money to the places that we do, and where it ends up, has been neglected. Fortunately, some of these issues can be addressed using simple theories from the field of behavioral science.
References
Andreoni, James. “Impure altruism and donations to public goods: A theory of warm-glow giving.” The economic journal 100, no. 401 (1990): 464-477.
Baron, Jonathan, and Ewa Szymanska. “Heuristics and biases in charity.” The science of giving: Experimental approaches to the study of charity (2011): 215-235.
Team, Behavioral Insights. “Applying behavioral insights to charitable giving.” Cabinet Office (2013).
Brooks, Arthur C. “Does giving make us prosperous?.” Journal of Economics and Finance 31, no. 3 (2007): 403-411.
Cancer Research UK. “Annual Report and Accounts 2016/2017.” Cancer Research UK (2017). https://www.cancerresearchuk.org/sites/default/files/cruk_annual_report_2016-17.pdf
Charities Aid Foundation. “The CAF UK Giving Report 2017.” CAF UK Giving 2017. April 2017. https://www.cafonline.org/docs/default-source/about-us-publications/caf-uk-giving-web.pdf?sfvrsn=8
Rotemberg, Julio J. “Charitable giving when altruism and similarity are linked.” Journal of Public Economics 114 (2014): 36-49.
Small, Deborah A., and George Loewenstein. “Helping a victim or helping the victim: Altruism and identifiability.” Journal of Risk and uncertainty 26, no. 1 (2003): 5-16.
Zajonc, Robert B. “Attitudinal effects of mere exposure.” Journal of personality and social psychology 9, no. 2p2 (1968): 1.
About the Author
William Phillips
Will completed his undergraduate degree in Mathematical Economics at the University of Birmingham, before moving on to Cambridge where he received his MPhil in Economics. It is here where he developed his interest in behavioural science, being able to discuss ideas with some of the leading thinkers in the academic world. He now works at a market intelligence and talent consultancy in London.
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