Info Cuts Charity

Our culture tends to celebrate the smart, creative, and well-informed. So we tend to be blind to common criticisms of such folks. A few days ago I pointed out that creative folk tend to cheat more. Today I’ll point out that the well-informed tend to donate less to charity:

The best approach for a charity raising money to feed hungry children in Mali, the team found, was to simply show potential donors a photograph of a starving child and tell them her name and age. Donors who were shown more contextual information about famine in Africa — the ones who were essentially given more to think about — were less likely to give. …

Daniel Oppenheimer … found that simply giving people information about a charity’s overhead costs makes them less likely to donate to it. This held true, remarkably, even if the information was positive and indicated and the charity was extremely efficient. …

According to [John] List, thinking about all the people you’re not helping when you donate  …  makes the act of giving a lot less satisfying. (more; HT  Reihan Salam)

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  • http://www.cygne-gris.blogspot.com Simon Grey

    “Today I’ll point out that the well-informed tend to donate less to charity.”

    If charity has a reciprocity element to it, then the rich wouldn’t have much use for it. Given that some charities/charitable functions were based on such reciprocity agreements, it seems reasonable to argue also that the rich’s weaker inclination toward charity is perhaps a function of societal expectation over time.

  • http://disputedissues.blogspot.com Stephen R Diamond

    One should hope that well-informed people resist giving to charities. Charitable contribution is manifestly irrational, and people are better at being rational when they have more facts to support their reasoning.

    Charities are a way of snookering people into volunteering what the government should provide.

    • NAME REDACTED

      …*looks stunned*…

      So you would rather people use force to provide goods than they be provided voluntarily? Or is this just a rationalization to not give?

      • Anonymous

        If governments are to be legitimate at all, providing basic social security through somewhat fair taxation is obviously their responsibility.

      • J1

        A lot of governments (most?) aren’t legitimate, and may have a motivation, if not a need, to see certain groups suffer. Or they may just not be able to help people, for whatever reason.

        The research didn’t seem to consider that more information makes it easier to come up with excuses not to give (which is, admittedly, sometimes the correct decision).

        GIving to United Way at work has nothing to do with reluctance to appear selfish or colhearted, and everything to do with the (frequently justified) fear that refusal to do so will damage you professionally.

        What is “fair taxation”?

      • http://disputedissues.blogspot.com Stephen R Diamond

        “So you would rather people use force to provide goods than they be provided voluntarily? Or is this just a rationalization to not give?”

        Is your voluntary giving just a rationalization for opposing wealth redistribution?

        The force assembled against a pauper to deprive him of what should be his is surely greater than the force that redistribution requires. Granted, the latter force is more cognitively available (in Kahnemann’s sense)—at least to those who benefit from gross income inequality.

      • Karl Hallowell

        The force assembled against a pauper to deprive him of what should be his is surely greater than the force that redistribution requires. Granted, the latter force is more cognitively available (in Kahnemann’s sense)—at least to those who benefit from gross income inequality.

        I merely wish reason were more “cognitively available” to you. The three obvious holes in your argument are the claim that force is being used to deprive paupers of stuff they never owned nor would own (“Can’t squeeze blood from a stone.”), the moral claim that taking stuff is good or bad depending on the social class of who you take it from, and third, that somehow force is different and smaller when it is used to take what you want rather than what you don’t want.

      • Anonymous

        Furthermore, the unfounded assumption that more or less force is the key criterion on which policy is better. Using force to redistribute wealth (or using force generally) is good whenever it predictably increases net utility. It’s a relatively undisputed claim that some level of (mandatory) redistribution increases net utility. A very poor person is far worse off not having access to a wealth baseline than a moderately to very wealthy person is worse off for losing some wealth through taxation. Taking stuff from a social class whose memebers don’t lose much quality of life from it is better than taking stuff from (or enforcing the poor status by physically implementing property rights) of poorer social classes. That’s not classism, it’s welfare efficiency improvement.

        “Fair” taxation would be taxation that aims at such a baseline without causing unnecessary inefficiency and favoritism.

      • NAME REDACTED

        “If governments are to be legitimate at all, providing basic social security through somewhat fair taxation is obviously their responsibility.”

        1) What makes a government legitimate or illegitimate?
        2) “obviously their responsibility” are you trolling now? because it sounds like you are assuming the antecedent.

      • http://daedalus2u.blogspot.com/ daedalus2u

        Asking what constitutes a legitimate government is a good question. Since I have already overcome my bias, 😉 I will answer the question, so those who would try to impose a system that would favor them can see why such a system would not be legitimate.

        Pretty obviously whether a government is “legitimate” or not can’t be determined by the government because all governments will say they are legitimate.

        It also can’t be determined by a subset of the population because the subset that is favored will always say the government that favors that subset is legitimate.

        It can’t be determined historically because even a legacy of legitimacy doesn’t ensure continued legitimacy, and changing needs may change what a government must do to stay legitimate.

        It can’t be determined solely through the consent of the governed because they can be tricked, fooled and might be exhibiting Stockholm Syndrome, and (see below), the group that is most important (the children that form the next generation of responsible adults) is not yet capable of making responsible choices.

        The most legitimate government would have the property of stability, that is it would maintain its legitimacy over time and be stable against foreign and domestic enemies.

        Since a legitimate government may require governance of all different types of people, the governance principles must be universal to all humans, and must be uniformly applied to all humans without favoring one group (ethic, religious, political, personal wealth, poverty, nepotism, sexual orientation, abilities, disabilities, etc.) over another.

        Since a legitimate government must apply governing principles objectively, such a government must be based on objective reality and science (to the extent possible) and not subjective personal belief, aka religion, prejudice, bigotry and wishful thinking. A government that promotes any kind of denialism or uses any kind of denialism as a basis for policy can’t be legitimate. For example, a government that condones slavery is illegitimate because it is based on the denial of the fundamental humanity of those who are classed as slaves.

        The property of stability requires that a legitimate government prevent irreversible degradation of the environment through non-regulation of externalities that damage the environment. (i.e. AGW denialism is incompatible with legitimate government).

        Since a regions greatest asset is its human capital, protecting, promoting, nurturing, increasing, and not dissipating the value of that human capital is the most important goal of a legitimate government.

        The property of stability requires that the needs of children be favored over the wants of adults so that the next generation of children will be educated and nurtured so as to be prepared to be the next generation of responsible adults.

        Since the abilities of a child as an adult are not predictable in advance, and because to maintain stability a government requires that at least some (preferably many/all) of its citizens be high achieving, a legitimate government would provide what its children require to grow into responsible adults including education, health care, adequate food, housing, protection from harm, and proper nurturing.

        I appreciate that I have not laid out a complete description of what constitutes a legitimate government, only some properties that a legitimate government must have. To the extent that a government does not have these properties, it is not legitimate. Many constitutions have clauses pointing out that illegitimate governments may be (should be) overthrown.

        http://en.wikipedia.org/wiki/Right_of_revolution

    • Karl Hallowell

      Charities are a way of snookering people into volunteering what the government should provide.

      So next time I want to feel or perhaps look charitable, I’ll give generously of Mr. Diamond’s resources and assets. Via government, of course. I’m pretty sure, I’d get plenty of support from most people who read your post above.

      The crucial thing about charities, as “Named Redacted” noted, is that they are voluntary and with due diligence on the part of the donor, they tend to get dispensed as the donor wishes. With government “charity”, it’s not voluntary and the former owners have no control over how it’s dispensed. That’s the very essence of rent seeking. And all sorts of selfish interests can mooch off the resulting revenue stream.

      For example, if you give money to the poor to buy food, then there is opportunity to pay or receive bribes in order to move things on and off the list of foods that one is allowed to purchase. Perhaps, the recipient uses a debit card to make those purchases. There’s an opportunity for a bank to hone in on the contract to provide those cards. The grocery store might need to pay a contractor to insure it is in compliance with this program’s regulations and requirements. There’s a whole host of moochers created with each poorly thought-out government welfare program.

      On the other hand, you could just give money to the local soup kitchen that you checked out. Then you would know that you’re feeding someone, not throwing money to some parasitic ecosystem.

      • Anonymous

        Isn’t that overly pessimistic regarding the poor people’s ability to identify and meet their own core needs? If you give money to the poor directly, they can buy food where they want. They won’t have to deal with a badly designed soup kitchen solution or with the social stigma that comes along with it. Why do you need requirements for how the poor use their money? Presumably they’ll buy food if they’re hungry. If they don’t, they’re essentially suicidal, and in that case, maintaining their lives against their will with increasing paternalism is a non-starter. That leaves the realm of efficiency and enters pointless violence.

      • Karl Hallowell

        Isn’t that overly pessimistic regarding the poor people’s ability to identify and meet their own core needs?

        Why do you think it’s overly pessimistic rather than appropriately pessimistic? Being in the position where you can’t feed yourself, sometimes happens because you can’t handle money or because someone steals it from you. Nobody steals eaten food.

        If there is a better way to realize such charity, then I would be interested.

      • Anonymous

        Why do you think it’s overly pessimistic rather than appropriately pessimistic?

        Hm, I’m not sure. I guess it depends on context. You’re right that eaten food can’t be stolen, but theft is a crime, and the better response to crime could be better law enforcement rather than more paternalism. Aid often fails because there is no feedback link between the donors (who have the financial power) and the beneficiaries (who are often passive recipients). This is one of the reasons why infrastructure projects are built, but then not maintained, compare this TED talk:

        http://www.ted.com/talks/david_damberger_what_happens_when_an_ngo_admits_failure.html

        Money is the unit of caring. Giving to the poor directly can be more effective if the poor have a minimum understanding of their own good, and theft is contained. The advantage is that the beneficiaries themselves are empowered (they can decide to whom to give the money).

    • Julia Wise

      I’d be happy for my government to provide a good safety net for its own residents, but I don’t think it should be responsible for everyone in the world. That’s the responsibility of their own governments. And, failing all that, of charity. Which is why I give.

  • ThomasT

    I’m not too familiar with Mali, so maybe I’m wrong here, but I assume that the contextual information given would be something along the line of “widespread corruption”, “misallocation of funds to the military” and so on. The usual stuff. And obviously a very good reason not to donate since it’s not hard to figure out that your money will probably do no good.
    But let’s assume the contextual information would be that Mali had been making great progress, corruption is almost non-existant and the only reason they need help is a genuine catastrophe. Are you saying that even then people more informed would donate less? Otherwise this finding has nothing to do with “info” in general and everthing with the “kind of info” which are two very different things.

  • NAME REDACTED

    ‘According to [John] List, thinking about all the people you’re not helping when you donate  …  makes the act of giving a lot less satisfying. (more; HT Reihan Salam)’

    Well yes, duh, it lowers your economic profit from the act, by raising the opportunity cost.

    • NAME REDACTED

      I should say lowers your perceived economic profit from the act, by raising the perceived opportunity cost.

  • Anonymous

    “This held true, remarkably, even if the information was positive and indicated and the charity was extremely efficient.”

    Fascinating. I wonder if this effect can be explained by the availability of other information that makes donating to even efficient charity a less rational decision (such as reducing the actual marginal utility estimate by, say, pointing out that governments or wealthy members of the local communities could solve these problems, but fail to). Or if it is just triggered biases reducing the altruistic motivation.

  • http://www.mccaughan.org.uk/g/ g

    Robin, you say you’re pointing out that “the well-informed tend to donate less to charity”, and then quote something that says something entirely different, namely that being in an analytical frame of mind when invited to donate tends to make you donate less.

    Do you have any actual evidence that the well-informed tend to donate less?

    • Karl Hallowell

      At a glance, the problem appears to be the analysis not the property of being well informed. For example, the research seems to indicate that impulse charity is more common than thought out charity. Suppose that applies throughout all economic decisions and that there’s advantage (perceived or real) to the decision maker thinking more about these sorts of decisions. Even if the charity in question is a good decision for charity giving, we still have the situation that other economic decisions may upon consideration decide the matter for charity giving. A person thinking about giving, might upon reflection recall that they still need to pay for that impulse-buy TV they got last month.

      It’d be interesting to see if this analysis for giving to a particular charity resulted in behavioral changes outside of charity giving. For example, does analyzing a charity turn out to reduce (for a time) the impulse to buy things completely unrelated to the charities considered?

  • ezra abrams

    Our culture tends to celebrate the smart, creative, and well-informed.
    I’m not sure what you mean by this, but it doesn’t sound right.

  • Mary

    Titles like “Info Cuts Charity” always seem to beg a “therefore . . . ” conclusion that is meant to be oppositional to conventional knowledge and, in this case, imply that a “good” is really a “bad” thing. I usually find a misquoted research report or ill defined assumptions behind such articles.

    The implication here is, more donations = more charity = a good, and since information = fewer donations and less charity = personal greed, we should all favor less information, more emotional giving and give in to the serotonin rush of feed good do-gooding without any reflection on results.

    There is also an implication that wasting money on charity is somehow “better” than other wasteful spending. If I give to United Way and it goes to fund big cars for the executive officers, even tho that is “bad” it is better than not giving to United Way at all, so the narrative goes. If I DON’T give to United Way (or some other charity) due to information, then I am “less generous”, not “making sure my money helps the most possible”. All in the narrative and definitional spins, I guess.

    The separation between donations and efficacy of a charitable organization is mirrored in many large NGOs and Aid Organizations operations. The revenue side of the operation is often shameless in their drive to increase donations/funding, occasionally damaging the reputation of the organization in the process and at odds with the folks on the ground doing the actual face to face aid/charity work.

    Haiti is an excellent example of aid organizations competing with each other for PR, for donation dollars, resulting in chaos, impaired efficacy of actual aid and millions of donation dollars left unspent and resting comfortably in the organizations coffers.

    If the goal is to measure my moral worth by how many dollars I give, then certainly no other information is required other than the address of the place to send the money. If the goal is to measure my moral worth by the impact I had on improving the lives of people, then I’m going to skip the emotional high and get the information I need to make sure my actions are truly improving people’s lives.

    • http://www.mccaughan.org.uk/g/ g

      Mary, I’m pretty sure that the nonstandard conclusion Robin is hinting at is more “charity is bad” than “information is bad”. (Of course both of those, as they stand, are too simplistic.)