Charitable giving: How emotion, peer pressure influence donations

While the holiday season is a money-making bonanza for retailers, it is also a key fundraising period for charities, which take the time to remind people in the midst of their gift-buying frenzy that there are organizations that could greatly benefit from even a few of their hard-earned dollars.

But given the sheer number of operating charities, how do people ultimately decide where to direct their money?

As it turns out, the way people choose to spend their charity money is influenced by a wide range of factors, from emotion to social pressure to convenience.

Charitable giving, “like most behaviour, is complex,” says Daniel Oppenheimer, a professor of marketing and psychology at the University of California Los Angeles. “There are many drivers for giving and many impediments to giving.”

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Canadians contribute about $10.6 billion to charities every year, according to the latest data from Statistics Canada (2010). That works out to about $446 per person.

Of the more than 80,000 charitable organizations registered with the Canadian Revenue Agency, the most popular are typically health-related ones such as the Canadian Cancer Society and the Canadian Diabetes Association, says Maggie Leithead, president and CEO of Charity Village, an online resource for the non-profit sector.

Leithead says that for the most part, people choose their charities based on a personal connection with a cause, which could mean knowing a friend or family member with a certain health condition or having an affinity for a specific social issue.

“If you’ve been touched by Alzheimer’s, for instance, you have a propensity to giving help there. If you’re an outdoorsy person, you may be drawn to more environmental organizations,” says Leithead.

“For most people, it’s pretty personal, and it starts with the things that matter to them.”

'Emotion and tangibility'

There is also research that suggests our political biases can have a strong influence on where we donate. A 2012 study jointly conducted by Rice University, the University of Texas at San Antonio and Pennsylvania State University found that Americans are more likely to donate to a charity that reflects the moral values of their political affiliation.

For example, people in the U.S. who identify as Democrats are more likely to give to organizations that promote customary Democrat values such as equality and protection from harm. Republican voters are more likely to donate to groups that espouse respect for authority, tradition and purity, according to the research.

Although charitable giving can align with an individual’s life philosophy, Oppenheimer says that many of us are susceptible to something more urgent: the “cute-puppy effect.”

“A lot of it is emotion and tangibility,” says Oppenheimer, who co-edited the book The Science of Giving: Experimental Approaches to the Study of Charity.

“A lot of times, people aren’t really choosing in any rational sense ‘this is the charity I want to go with.’ It’s that they see something and they feel a strong urge to fix it, to do something, to help.”

He says the devastation wrought by the recent typhoon in the Philippines is one example of this, where images of shattered homes and separated families moved many people the world over to donate immediately.

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Rose Anne Devlin, vice-dean of research in the faculty of social sciences at the University of Ottawa, says social pressure is another strong factor in giving.

“There are a number of empirical studies that suggest individuals do respond to peer pressure – they respond when there is a [charitable] norm,” says Devlin.

The social pressures of giving

That can mean taking part in a cancer charity run because a number of your friends are doing it, or contributing to a wildlife organization because a sibling has asked for donations in lieu of birthday gifts.

A more subtle form of peer pressure can also influence how much people donate to specific charities, says Devlin. For example, in their direct-mail campaigns, charities will often “suggest” a donation amount – say, $100. It’s by no means mandatory to donate this much, but Devlin says because this arbitrary number is perceived as the norm, people will typically give at least that much.

We’re seeing more people start to think more about their giving proactively, rather than just sort of responding to solicitations that come in.- Maggie Leithead, CEO of Charity Village

She cites a similar example in a U.S. study that looked at how much people would donate to an art gallery if all contributions were visible in a large glass bowl.

“If you start off the glass bowl with $20 bills in it, people tend to give more than if you start off the bowl with coins in it,” she says.

While we get countless entreaties to donate every day, Oppenheimer says there are still many barriers to giving.

One is what he calls the “channel factor,” which is not knowing the most expedient method to giving money to a specific charity. Although finding out how to give to a certain charity can be ascertained with a simple Google search, even such seemingly trivial actions “can act as large psychological barriers, because they actually force you to go and do something.”

To make it more convenient for people, and thus ensure a greater success rate, most charities include a phone number in their fundraising literature.

Another, more fundamental barrier is the psychological pain of parting with your money, says Oppenheimer. Many charities have discovered that this can be alleviated by offering people the option of a “pre-commitment,” such as authorizing direct bank withdrawals or taking a small amount off a person’s bi-weekly pay cheque.

“A lot of times, people are willing to donate money they don’t yet have,” says Oppenheimer.

Despite the overwhelming number of charities in Canada, Charity Village’s Leithead says she has noticed that people are becoming more tactical about their giving.

“We’re seeing more people start to think more about their giving proactively, rather than just sort of responding to solicitations that come in,” she says.