Charitable donations are ripe with what seem to be irrationalities: door-to-door charitable contributions can be doubled when the donations are solicited by women 1 SD above the norm in attractiveness, we divide our contributions among multiple targets rather than putting 100% in the area with the highest marginal impact, and do very little to investigate charitable efficiency in the first place. At the same time, Christmas gifts are subject to staggering deadweight losses. In both cases, the failure to efficiently realize the supposed objective of benefitting the recipient can be explained by attributing the decision to a ‘purchase of identity,’ or signalling function. Someone who will tithe 10% of her income to Habitat for Humanity to build house for plump, but relatively poor, Westerners demonstrates her generosity just as well as someone who saves dozens of children from death by malaria by purchasing nets and DDT for an African village, even though the latter does more good.
My three-for-one proposal: rationalist types should ask for charitable gift certificates (the charity signs up as a project, and then recipients can allocate the value of their gift cards at will) this Christmas, and then donate the proceeds to some high-impact but unconventional charity. (What’s the third bias addressed, you ask? The self-serving bias that keeps our charitable contributions so low!)
1. Will this bring in a smaller total in gift expenditures? Do weddings that request donations to a named charity take in less than those that use a gift registry?
2. Would an exchange of two $100 charitable gift certificates between friends really feel less silly than the exchange of two $100 bills because of the public commitment function?
3. Would this work for weddings or bar mitzvahs?