Donors’ Behavior Not Very Rational, Economist Says

Donors do not seem to care much about the results of their giving, presenting a stark contrast to the way people act when they invest in the stock market, writes Tyler Cowen, a George Mason University economist, in an article in The New York Times.

Mr. Cowen says that because charities represent about 2 percent of the nation’s gross domestic product, it is important to improve their performance, and that some economic studies being done now point to ways to understand donor behavior.

He notes that John A. List, an economist at the University of Chicago, has found that few donors take advantage of efforts to make their giving more effective, and that they tend to respond more generously to attractive fund raisers, rather than giving solely based on the merits of the cause.

See The Chronicle’s two articles on Mr. List’s research about matching gifts and attractive fund raisers.
(A paid subscription is required to view these articles.)