Warm glow of giving collectively – An experimental study

We report on an experiment to test for a warm glow of giving collectively. Comparing subjects’ affective state before and after the experiment, we find that individual charitable donations create a feeling of warm glow while collective donations do not. Proposing to donate the full endowment collectively improves subjects’ affective state significantly, though the behavioral data suggests that this result cannot be explained by the notion of expressive voting. We also find that subjects who consider Kant’s Categorical Imperative to be an important guideline for individual decisions are more likely to donate the full endowment to charity. This result supports the notion of Kantian thinking as an independent factor explaining cooperative behavior (Roemer, 2014).     

Motivating Mormons

Despite numerous studies on motivation for generosity, much remains unknown. Given that the lion's share of giving and volunteering is directed toward religious institutions, we aimed to test the motivation for the generosity of Mormons. Previous research has indicated that Mormons (Latter‐day Saints) volunteer and donate at much higher levels than other groups. This study examined how self‐reported motivations to volunteer explain the annual number of hours volunteered and the likelihood of donating toward various causes. We used thirty qualitative interviews with Latter‐day Saints to create a comprehensive questionnaire measuring the time spent engaged in various volunteer activities and whether or not the respondents donated to various causes. The questionnaire also asked respondents to rank how important twenty‐five different motivations were to their service or volunteering. We used factor analysis of the results on the twenty‐five motivation items to identify underlying variables behind volunteer motivations, and we used the scores on the five resulting factors in multiple regression analyses to predict volunteer hours and logistic regression analyses to predict the likelihood of making donations. Different types of motivations predicted different types of volunteering and charitable giving. Theological motivations had the broadest impact and predicted religious volunteering, social volunteering to benefit church members, social volunteering through the church to benefit the community, religious donations, and donations toward social causes made through the church. After inserting control variables into our models, we found that none of the five types of motivations predicted secular volunteering or secular charitable giving. We conclude with managerial and conceptual implications of these and other results.     

Charity,Volunteering Type and Subjective Wellbeing

We examine the impact of volunteering and charitable donations on subjective wellbeing. We further consider if the model of the volunteering work (formal vs. informal) and the geographical location of the charity organisation (local vs. international) people donate to has any impact on subjective wellbeing. Using UK’s Community Life Survey data, we find that volunteering and engagement in charity are positively associated with subjective wellbeing, measured by individual life satisfaction. We show that while there is a positive effect of volunteering and charity on life satisfaction, the level of utility gained depends on the type of charity or volunteering organisation engaged with (i.e. local or international). Specifically, donating to local (neighbourhood) charities as opposed to international/national charities is associated with higher wellbeing. Similarly, engaging in informal volunteering, compared to formal volunteering, is associated with higher wellbeing. To explain our results, we use the construal-level theory of psychological distance, which suggests that people think more concretely of actions and objects that they find spatially and socially close.

     

PRIMING THE CHARITABLE PUMP: AN EXPERIMENTAL INVESTIGATION OF TWO‐STAGE RAFFLES

We experimentally study two‐stage self‐financing raffles in which participants can buy tickets in two stages. In all raffles, one half of the proceeds are donated to a local charity and the raffle winner wins the other half. The mechanisms differ by what happens to the tickets purchased in the first stage. In the complete draw down two‐stage raffle, the first stage tickets are eliminated from the active pool of tickets, while in the no draw down raffle they remain in the active pool. We find that both two‐stage raffles initially perform better than the standard one‐stage 50–50 raffle. Over time, the aggregate contribution level in the complete draw down raffle declines and approaches that of the one‐stage raffle, while in the no draw down raffle contributions are stable and remain higher than those in the other two mechanisms. In both two‐stage raffles, we observe a positive correlation between the proceeds of the first stage and the number of tickets bought in the second stage. Our results are at odds with a standard warm glow model of giving, and also cannot be explained by the joy of winning or learning about bidders' types. (JEL C72, C92, D64)     

Will You Trust Me?: How Individual American Donors Respond to Informational Signals Regarding Local and Global Humanitarian Charities

When making charitable donations, individuals would like to have some assurance that their resources will be used appropriately, but they do not necessarily have the time to research charities thoroughly. Charities have thus joined voluntary regulatory programs to signal trustworthiness and good governance. We conduct a survey experiment to explore if individual donors in the United States are more willing to give to a charity participating in a voluntary regulatory program. Because voluntary programs vary in their institutional design, we further test whether the provision of third-party auditing (to ensure that charities abide by program rules and obligations) enhances donor confidence in the voluntary program. Finally, we explore whether individuals seek to circumvent information problems by donating to local charities as opposed to overseas charities. We find that charity membership in a voluntary program does not influence people’s willingness to donate significantly, but that location of operations is significant.     

Income earning opportunity and work performance affect donating behavior: Evidence from dictator game experiments

Using dictator game experiments, the authors investigate the effect on donation of the dictator and/or recipient working prior to the dictator donating. We focus on two issues that previous studies have not considered. First, we examine the impact on donating behavior of a difference in endowment caused by the dictator's work performance. Second, we explore donation behavior when the recipient's work does not yield income or affect the dictator's endowment, but the recipient's work performance is made known to the dictator. Experimental results indicate that donating behavior is affected not only by the dictator working, but also by the recipient working. In addition, donating behavior is affected by income level, as determined by the dictator's work performance, and is influenced by the recipient's work performance, two findings not previously reported.     

Visible Minorities and Majority Giving

We examine if the presence of minority individuals in the community affects the decision to give to charities by majority individuals. We focus on two giving decisions by the majority population. The first is giving to any charitable organization; the second is giving to organizations geared to international causes. We also examine these two decisions when the sample is split into religious and non-religious individuals. We find that the larger the proportion of minorities in a given community, the less likely that members of the majority group give to charity in general—supporting the idea that heterogeneous communities deter outreach—but the more likely they are to give to international causes, giving credence to Allport’s ‘contact’ hypothesis.     

ROUND GIVING: A FIELD EXPERIMENT ON SUGGESTED DONATION AMOUNTS IN PUBLIC‐TELEVISION FUNDRAISING

Direct‐mail fundraisers commonly provide a set of suggested donation amounts to potential donors, in addition to a write‐in option. Standard economic models of charitable fundraising do not predict an impact of suggested amounts on charitable giving. However, our field experiments on direct‐mail solicitations to over 10,000 members of a public television station tell a different story. We find that changing one of the suggested amounts in an ask string from $100 to $95 reduces the number of gifts greater than or equal to $90 by more than 30%. This contrasts with our finding that in three independent comparisons, increasing the entire vector of suggested amounts by 20%–40% reduces the probability of giving by approximately 15%, with little effect on the average size of the gift. Both manipulations lead to a larger proportion of write‐in donations, even as they reduce the number of total gifts. We propose a simple behavioral theory to explain the data: many donors prefer to give round numbers, and donors incur a cognitive cost when choosing to give a nonsuggested amount. (JEL C9, H4)     

CHARITABLE GIVING,EMOTIONS, AND THE DEFAULT EFFECT

We report an experiment to study the effect of defaults on charitable giving. In three different treatments, participants face varying default levels of donation. In three other treatments that are paired with the first three, they receive the same defaults, but are informed that defaults are thought to have an effect on their donation decisions. The emotional state of all individuals is monitored throughout the sessions using Facereading software, and some participants are required to report their emotional state after the donation decision. We find that the level at which a default is set has no effect on donations, and informing individuals of the possible impact of defaults also has no effect. Individuals who are happier and in a more positive overall emotional state donate more. Donors experience a negative change in the valence of their emotional state subsequent to donating, when valence is measured with Facereading software. This contrasts with the self‐report data, in which donating correlates with a more positive reported subsequent emotional state. (JEL C91)     

FUNDRAISING INTERMEDIARIES INHIBIT QUALITY‐DRIVEN CHARITABLE DONATIONS

Charitable donations are frequently raised by an intermediary, which accepts donations and subsequently sends the proceeds to the chairty—for example, a workplace campaign for United Way, a 5‐km walk for Susan G. Komen, or buying cookies from a local troop for the Girl Scouts. These fundraisers can greatly increase donations received by a given charity, but how do they affect what types of charities we support? This article shows intermediary fundraisers can make donors insensitive to differences in charity quality: Unattractive charities can receive the same financial support as an attractive charity. In a series of across‐subject experiments, when donations are framed as going directly to the charity, unattractive charities receive fewer and smaller contributions relative to attractive charities; however, when donations for the same charities are collected by (meaningless) intermediary fundraising campaigns, donations become indistinguishable across charities. The fundraising campaign does not affect donor recall of charity identity or evaluation of charity quality; it simply precludes donors from using these data in the donation decision. Follow‐up experiments suggest the results are driven by information overload. (JEL A13, C91, C93, D61, D64, H41)     

Generous or Greedy Marriage? A Longitudinal Study of Volunteering and Charitable Giving

Recent scholarship has explored whether marriage encourages individuals to contribute to or withdraw from society. The authors examined how marriage affects volunteering and charitable giving, using longitudinal data from the 2001 to 2009 waves of the Panel Study of Income Dynamics. Newly married men, but not women, were significantly more likely to give money to charity in the first survey wave after marriage and gave larger amounts of money. Newly married women, but not men, were significantly less likely to volunteer after marriage and volunteered fewer hours. Marriage had a stronger effect on religious giving than overall giving among men and had a significant and positive effect on religious giving among women. Marriage had a stronger positive effect on men's giving in the second wave after marriage than after the first.     

MONETARY POLICY AND ENDOWMENT RISK IN A LIMITED PARTICIPATION MODEL

A limited participation model is constructed to study the risk‐sharing role of monetary policy. A fraction of households exchange money for interest‐bearing government nominal bonds in the asset market and the government injects money through open market operations. In equilibrium, money is nonneutral and monetary policy redistributes consumption across households. Without idiosyncratic endowment risk, monetary policy becomes a perfect risk‐sharing tool, but with idiosyncratic endowment risk, it is not. The Friedman rule is not optimal in general. (JEL E4, E5)     

From communal charity to national welfare: Jewish orphanages in Eastern Europe before and after World War I

This article examines Jewish institutions for the care of orphans in an attempt to understand several aspects of Jewish life in Eastern Europe: (1) attitudes towards orphans on the part of communal leaders, intellectuals, and political activists; (2) the transition of Jewish charitable and (in the modern period) philanthropic institutions from the pre‐modern communal charity of the early nineteenth century to modern “scientific philanthropy” at the fin de siècle to national welfare in the interwar period; (3) and, to a lesser extent, the experiences of orphans themselves, as far as is possible to ascertain from documents relating to the institutions that cared for them. Marginal figures such as orphans were of growing concern to the organised Jewish community in its increasingly complex encounter with modernity in the Russian Empire, and traditional patterns of charity, family life, and relations between socioeconomic classes were cast into doubt by new government policies and modern scientific attitudes arriving from Western and Central Europe. The religiously mandated charity of the pre‐modern kehillah gave way to a paternalistic philanthropy that aimed to mould a generation of “productive” working‐class Jews. However, the upheavals of World War I and the mass politicisation of East European Jewry brought about a transformation in attitudes towards orphans and other marginal groups, whose care was made a centrepiece of national, and nationally minded, Jewish communal life in the interwar Polish Republic.     

On the social stability of coalitional property rights regimes

We present a model of coalitional property rights (CPR) regimes– regimes in which ownership of a good is attributable to coalitions of various sizes. Specifically, for each good, we define a legal structure that specifies the legal coalitions of individuals that share a communal claim to that good. Generally, each legal coalition may use exclusionary rules to allocate its holdings internally. These rules allow eligible subcoalitions to recontract by expropriating some fraction of the legal coalition's endowment. We then ask: what types of CPR regimes are socially stable in the sense of having a nonempty core? We give conditions on the legal structure and the primitives of the economy that achieve social stability in this sense. We emphasize two cases of particular interest. ( I ) Unanimity. Unanimity is required for a legal coalition to recontract against (block) the status quo. In this case, the core is nonempty under standard assumptions. Each agent's ability to veto an alternative allocation allows a partial characterization in terms of the economies that are privatized by dividing up the communal endowment among the members of each legal coalition. We show that in some economies' collective vs private ownership matters in terms of social stability. ( II ) Exclusion. Many eligible subcoalitions can expropriate the legal coalition's entire endowment. An example is the collection of simple majorities. The presence of cycles can easily lead to social instability. We show that if endowment holdings are sufficiently “specialized” and each agent's “veto power” sufficiently large, then stability can be achieved despite the presence of cycles in some goods. Received: 30 June 1993/Accepted: 28 February 1998     

Patterns in Household Giving: Evidence From U.K. Data

The Family Expenditure Survey provides a long time series of household-level data on U.K. charitable giving, which previously has not been exploited. Data analyzed for the period 1978–93 reveal a long-term decline in the proportion of households giving to charity, which persists once we control for changes in other characteristics that affect giving, such as income and wealth. The biggest declines in the number of givers are among younger and poorer households. We also draw out generation-specific trends in a way that is crucial to thinking about future trends in funding for the voluntary sector.     

SECRET SANTA REVEALS THE SECRET SIDE OF GIVING

This article shows how a secret Santa gift exchange offers unique insights into the nature of generosity and charitable giving. In a dictator experiment modified with features similar to a secret Santa gift exchange, I find that individuals contribute less when their gifts are allocated such that each person gives to fewer recipients. The results are inconsistent with both altruism and warm glow, suggesting that players are motivated by something in addition to these conventional models of generosity. Several alternative models of generosity are shown to be consistent with the experimental findings, all of which imply that, in addition to any positive externalities, giving can also carry a negative externality. ( JEL H41, C92, D62)     

SPENDING WISELY? HOW RESOURCES AFFECT KNOWLEDGE PRODUCTION IN UNIVERSITIES

Every year billions of dollars are spent on research grants to produce new knowledge in universities. However, as grants may also affect other research funding, the effects of financial resources on knowledge production remain unclear. To uncover how financial resources affect knowledge production, we study the effects of research spending itself. Utilizing the legal constraints on university spending from an endowment we develop an instrumental variables approach. Our approach instruments for university research spending with time‐series variation in stock prices interacted with cross‐sectional variation in initial endowment market values for research universities in the United States. Our analysis reveals that research spending has a substantial positive effect on the number of papers produced, but not their impact. We also demonstrate that research spending effects are quite similar at private and public universities. (JEL H5, I2, O3)     

Free versus regulated migration: Comparing the wages of the New Zealand-born,other migrants and the Australia-born workers in Australia

New Zealanders can cross borders freely, work and live in Australia indefinitely thanks to the Trans-Tasman Travel Agreement. This paper uses a recently developed decomposition method to decompose the weekly wage gap at various quantiles on the wage distribution between New Zealand-born (NZ-born) and Australian-born workers, and between NZ-born workers, migrants from other English speaking countries (OESC), and from non-English speaking countries (NESC) to determine how free and regulated migration influences migrants’ performance in the Australian labour market. We found that NZ-born workers earned higher weekly wages than both Australian-born and NESC workers but earned lower wages than OESC migrants. Differences in endowment were primarily responsible for the wage gaps between NZ-born and Australian-born workers and between NZ-born and OESC migrants. However, differences in returns to worker and job characteristics are mainly responsible for the wage gap between NZ-born and NESC migrants.     

Differences in the Donor Behavior Characteristics of Young Affluent Males and Females: Empirical Evidence from Britain

The objectives of this study were to obtain a deeper understanding of the donor behavior characteristics of young affluent individuals; and to ascertain whether young affluent women differed significantly from young affluent males in their approaches to philanthropy. Two hundred and seventeen investment bankers, accountants, and corporate lawyers, aged under 40 years, earning more than £50,000 annually and working in the City of London were questioned about their attitudes and behavior in relation to charitable giving. Significant differences emerged between the donor behavior characteristics of males and females. A conjoint analysis revealed that whereas men were more interested in donating to the arts sector in return for social rewards (invitations to gala events and black-tie dinners, for example), women had strong predilections to give to people charities and sought personal recognition from the charity to which they donated.     

INVESTMENT CHOICE ARCHITECTURE IN TRUST GAMES: WHEN “ALL‐IN” IS NOT ENOUGH

While many economic interactions feature “All‐or‐Nothing” options nudging investors towards going “all‐in,” such designs may unintentionally affect reciprocity. We manipulate the investor's action space in two versions of the “trust game.” In one version investors can invest either “all” their endowment or “nothing.” In the other version, they can invest any amount of the endowment. Consistent with our intentions‐based model, we show that “all‐or‐nothing” designs coax more investment but limit investors' demonstrability of intended trust. As a result, “all‐in” investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness. (JEL C72, C90, C91, D63, D64, L51)