The more some donors know, the less they give

Shaking out every dollar.

The movement to show impacts for aid programs continues to gain steam within the humanitarian sector. But what about the donors? Will more transparency and information about the impacts of a program affect their giving habits?

The answer to that question appears to be sort of yes.

For larger donors, sharing the scientific impact of a program led to an increase in giving. It was the opposite for small donors. They give less after seeing the scientific impact of a program they are supporting.

More information leads some donors to give more and others to give less. However, on average adding scientific impact information has no effect on giving.

For the people who are affected, Dean Karlan and Daniel H. Wood suspect that is because of what motivates a person to give. They lump the large donors together as altruists who tend to give larger sums of money to only a few charities. The smaller donors give small amounts to many charities and are driven by the ‘warm glow’ feelings associated with the act.

“Those motivated by altruism will respond positively to appeals based on evidence, whereas those motivated by warm glow may respond negatively to appeals based on evidence as it turns off the emotional trigger for giving, or highlights uncertainty in aid effectiveness,” posit Karlan and Wood.

The two researchers conducted a field experiment to determine their conclusions. Working with Freedom From Hunger, they added an insert to the organizations direct letter appeals to roughly 17,000 supporters. In the first mailing, three groups were randomly assigned. The first did not have an insert. The second contained an insert with an emotional appeal and the story of one person who benefited. The third group also got an insert, but the final paragraph was switched out to mention studies that used “rigorous scientific methodologies,” proving the efficacy of Freedom From Hunger’s work.

Another wave of direct mail appeals were sent out eight months later. Minor tweaks were made from the first wave. There was again a control group who had no insert. Then there was one group that were told that Yale researchers backed the statistics used in the mailing. The final group were provided additional information n the effectiveness of the organization’s programs in helping people.

The impact of the experiment was most pronounced among regular donors. Large donors donated an average of $12.98 more when they received the additional information about the impacts of Freedom From Hunger’s programs, than those who did not. Smaller frequent donors were less likely to give, by 1.4 percentage points, and donated roughly $1 less when provided the additional information.

“Altruistic donors, we posit, are more driven by the actual impact of their donation, and thus information to reinforce or enhance perceived impacts will drive higher donations,” write Karlan and Wood in the conclusions.

The smaller donors, who they say are motivated by the warm glow associated with giving, may find the data-heavy information a distraction from the things that usually appeal to get them to give. However, the authors are careful to admit that the assignments of motivations to donors, large and small, comes with their own problems. The actual motivations are based on previous research, but may not necessarily be the case in this experiment.

What they prove is something that was already expected, better and more evidence of impact does not motivate every person to give.

HT Tyler Cowen

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.