Elsewhere online
August 23, 2016

Studies Examine Why People Give Differently Than They Invest

A quartet of academics specializing in marketing and behavior write in MarketWatch about their studies comparing people’s decision-making on charitable donations and investments. The researchers from the London Business School, New York University, the University of Chicago, and the University of Pennsylvania juxtapose their findings with the tenets of the effective-altruism movement, which calls for donors to seek the greatest impact — for example, in terms of lives saved — from each dollar they give.

In one study, test subjects were presented with five investment and five charitable options and given value information for each. Seventy-three percent chose the investment that offered the greatest value, but only 56 percent did so in deciding where to donate. Respondents said they viewed giving decisions as more a matter of personal taste than of objective truth.

But the scholars noted that while emotions played a greater role in giving decisions involving charities with different causes, donors do focus more on effectiveness when weighing groups involved in the same cause. They write that taking that into account and “establishing a compromise between people’s feelings and the numbers may provide a middle ground” for fundraising appeals.