A Picture Or A Thousand Words?

 In Charity, Fred's Blog, Giving, Gratitude, Money, Philanthropy, Uncategorized
Listen to “A Picture or a Thousand Words” by Fred Smith

 

Several years ago I read an article in the Boston Globe about research being done on the reasons people give and motivating them to give more. This week, ten years later, I found an update and new insights.

“What we find is when people are thinking more deliberatively . . . they end up being less generous overall ” said Deborah Small an associate professor of marketing and psychology at the University of Pennsylvania’s Wharton School.

Is it possible to be both generous and smart about it? A lot of donors would like to think so but new research suggests that it may be harder than we realize. And while there may be things we can do to make sure our money doesn’t end up wasted charity there appears to be one area where we have to be extra-careful not to let our brains get in the way.

Not only does deliberating about our giving tend to affect the amount but other research probing the impact of matching gifts was interesting. It is less than expected.

This conclusion is bolstered by the findings of John List an economist at the University of Chicago who tested the effectiveness of so-called matching programs in which a major supporter agrees to match the contributions of individual donors. List expected to find that matching programs enticed people to give by creating the (correct) impression that their money would go further. But List’s results were curious: While charities that offered a matching program did inspire more people to give than charities that didn’t he was surprised to find that a higher matching ratio didn’t lead to larger donations. People whose donations would be quadrupled — a huge increase in the power of their gift — didn’t donate any more money than people whose donations would simply be doubled. “People get utility or satisfaction out of giving to a good cause. And they do not care how much public good is provided,” List said.

Deborah Small also found that more information about an issue or an organization had a negative effect on giving.

Small conducted an experiment with George Loewenstein of Carnegie Mellon University and Paul Slovic of the University of Oregon showing that when people were given more facts and statistics about the problem a charity was trying to address they actually became less likely to donate. 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…One reason analytical thinking might have this effect on the charitable impulse is that once people really think through what the charity they’ve selected might accomplish with their money they start realizing just how little their contribution is going to help. This is sometimes referred to as the “drop in the bucket” effect. According to List, thinking about all the people you’re not helping when you donate — the millions of children left to starve for each one you save — makes the act of giving a lot less satisfying.”

She also studied the effects of providing effectiveness ratings for organizations. People were given a rating scale of charities with higher scores indicating this charity does more good than others. “We made it really easy for participants in the study to get the answer right – and they just don’t, for the most part, use that information. I think what we learned is they just don’t see that information as relevant for this type of decision. They see it as very relevant for a decision between financial investments, but not so relevant for this charity decision.”

Finally, she discovered that charities must be very careful in how they present their impact information. If you are very specific about the “unit cost” of, say, a mosquito net, or a pair of shoes or pair of eyeglasses, people will tend to give exactly that amount. If a mosquito net cost $1, donors tend to give $1. If it costs 50 cents, they give 50 cents. As a result, when the cost of the malaria net is cheaper, they’re actually giving less.

I keep a card on my desk with a quote from Edmund Burke to remind me of my commitment to giving – whatever the amounts or the impact will be.

“Nobody makes a greater mistake than he who did nothing because he could only do a little.”

All the schemes and plans to influence our giving eventually fall in on themselves and we are left, thankfully, with the one reason that outlasts them all: gratitude to God.

 

Fred Smith
Fred Smith is a graduate of Denver University and Harvard Divinity School. He spent several years as teacher and administrator at Charlotte Christian School and The Stony Brook School before co-founding Leadership Network with Bob Buford and serving as President for 12 years. Fred is the Founder of The Gathering, an international association of individuals, families and private foundations giving to Christian ministries. Fred will tell you his true vocation is that of a Sunday School teacher and it is this role for which he would most like to be remembered. Fred and his wife, Carol, have two grown daughters and a son-in-law. They also have three well-loved grandchildren.
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Showing 12 comments
  • Peter
    Reply

    Fred, wow, i am laughing at how true, painful and i am not sure what else this blog is — i spend a lot of time researching giving and i LOVE the new resources — so interesting on their findings

    Your SUMMATION IS PURE JOY — Gratitude to GOD

  • Todd P
    Reply

    So true Fred – the bottom line is it’s a privilege to give and wholly connected to gratitude to God for what He has done for us! I’ve experienced the “drop in the bucket” effect for sure…..
    Always grateful for and challenged by your thoughts!

  • Todd
    Reply

    Fred,

    Fascinating research on motivation and giving patterns. I love your conclusion! Gratitude to the original generous giver!

    • Fred Smith
      Fred Smith
      Reply

      Thank you, Todd. I love the Edmund Burke quote as it balances out the whole “megadonor/high capacity” language we have too often used.

  • Kevin
    Reply

    Great post, Fred. Very eye-opening. I agree with Peter’s comment. Gratitude to God. Amen and amen.

    • Fred Smith
      Fred Smith
      Reply

      Thank you, Kevin. We should catch up sometime.

  • Beckham
    Reply

    Fred, I love your final statement:

    All the schemes and plans to influence our giving eventually fall in on themselves and we are left, thankfully, with the one reason that outlasts them all: gratitude to God.

    Thank you for being a thinker who puts difficult concepts in easy to understand prose.

    Kim

    • Fred Smith
      Fred Smith
      Reply

      Thank you, Kim. Sometimes I do just the opposite – make simple things complicated!

  • Eric
    Reply

    This unfortunately rings true in my life. I think this focus in the last 15 years on “Stewardship” has had an unintended consequence of overthinking and undergiving; rather than simply responding to needs. There is for sure a balance as we don’t want to see money go to waste, but I know our desire to be good stewards, and over-analyzing things to “make sure” we are making the right decisions; giving the right amount to the most effective charities, etc. has left us with more funds sitting ready to be given. what is it they say about good intentions?=)

    • Fred Smith
      Fred Smith
      Reply

      Thank you for this perspective, Eric. I suspect we have all experiences the same temptation and distraction. It’s not a perfect science, is it?

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