I would like to thank the New York Times Magzine for giving me what is sure to be a week's worth of entries by dedicating an issue to philanthropy.
Today I’d like to comment on David Leonhardt's article “What Makes People Give?”. The article discusses some interesting behavioral economics research that suggests that the reasons people give to charity are much more complicated than we usually think.
One theory that the research supports is the “warm glow”theory. This suggests that people give money in order to be the kind of person who gives money – the effects of the donation are secondary. Leonhardt points out that this means philanthropy needn't be zero-sum because the existence of bigger donors (like Gates and Murdoch) doesn't make regular people stop wanting to feel like philanthropists. That's a good point.
I think the “warm glow” feeling also suggests that we should be more careful about programs like (Red) that allow people to buy into the philanthropy for the cheap price of a $25 t-shirt. My fear is that the t-shirt will be enough to make people feel like they are contributing and cause them to give less through more effective causes.
But this is just an initial concern, if the economic conclusions in the article tell us anything, it is that the psyschology behind philanthropy is complicated, and it isn't a good idea to jump to conclusions before we’ve had a chance to test them.
