‘New York Times Magazine’: Why People Give

Conventional wisdom about why people give is “too pat, too simple — and sometimes just wrong,” writes The New York Times Magazine (March 9). Now new economic research points toward better ways to raise money.

The article outlines studies by two economists who, instead of relying on rules of thumb and fund-raising hunches, ran controlled experiments to determine what entices people to donate.

For instance, they sent nearly identical fund-raising letters to thousands of people, but added a line in some of them about a matching grant — saying that if the person who received the letter donated money, some unnamed rich benefactor would provide an equal sum or triple the amount.

Mentioning the matching grant did entice people to give more; but surprisingly, whether the matching grant was one-to-one (donating $100 earns $100 from the rich person), or three-to-one (donating $100 earns $300) made no difference in how much people gave, even though their money would do much more good in the second case.

As the author points out, that response isn’t rational: “It was as if Starbucks had cut the price of a latte to $2 and sales didn’t increase.”

But rational or not, it is the way people behave, and it behooves fund raisers to realize that.

The economists also provided other tantalizing results. They found that isolated people — like liberal people in a red state, or environmentally friendly people in a blighted urban area — give more because they lack other ways to contribute to pet causes, and doing so salves their consciences. The article calls this “impure altruism.”

In addition, good-looking women raise more money in door-to-door drives, but those gifts don’t translate into follow-up donations.

On the other hand, raising money by giving people the chance to win something in a lottery somehow does translate into follow-up gifts, even if they don’t win.

The fund-raising article is part of a special issue on philanthropy, including stories on the following topics:

• How charities can adopt business practices to their advantage, and what steps one health group is taking to put itself out of business.

• Whether celebrities really can change the world through advocacy.

• Foundation efforts to assess the impact of their gifts, and whether current evaluation systems make sense for grant makers.

• Whether the new approaches taken by donors are doing much to improve the nation’s school systems.

• The philanthropy of Herb and Marion Sandler, who have a reputation for sponsoring unusual ventures (like investigative-journalism centers, or science research unrelated to diseases or causes) and keeping tight control over the people and projects they support.

• What makes the very wealthiest Americans decide to give money away, when they could instead invest in businesses or pass money to their heirs.

• What motivates people to be altruistic.

• Why chefs and restaurant owners believe it is important to get involved in fund-raising activities.

The articles from the magazine are available online.