Impediments to Effective Altruism: The Role of Subjective Preferences in Charitable Giving

Berman, Jonathan; Barasch, Alixandra; Levine, Emma; Small, Deborah A.

doi:10.1177/0956797617747648

Cited by 126 publications

(132 citation statements)

References 30 publications

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“…People's willingness to donate to prosocial causes is famously biased by affective influences, such as the ease of imagining an individual relative to a statistic (Small et al, 2007). Consumers often deny that one charitable cause can be objectively worthier than another (Berman et al, 2018). And even among donations to the same cause, the donation's reputational impact tends to be guided by the amount of sacrifice rather than social good (Johnson, 2020), producing little social incentive for effective giving.…”

Section: Discussionmentioning

confidence: 99%

Moral Signaling through Donations of Money and Time

Johnson¹,

Park²

2019

Preprint

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Prosocial acts typically take the form of time- or money-donations. Do third-parties differ in how they evaluate these different kinds of donations? Here, we show that consumers view time-donations as more morally praiseworthy than money-donations, even when the resource investment is comparable. This moral preference occurs because consumers perceive time-donations as signaling greater emotional investment in the cause and therefore better moral character; this occurs despite consumers’ belief that time-donations are less effective than money-donations (Study 1). The more signaling power of time-donations has downstream implications for interpersonal attractiveness in a dating context (Study 2) and for donor decision-making (Study 3). Moreover, donors who are prompted with an affiliation rather (versus dominance) goal are likelier to favor time-donations (Study 3). However, reframing money-donations in terms of time (e.g., donating a week’s salary) reduced and even reversed these effects (Study 4). These results support theories of prosociality that place reputation-signaling as a key motivator of consumers’ moral behavior. We discuss implications for the charity market and for social movements, such as effective altruism, that seek to maximize the social benefit of consumers’ altruistic acts.

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Section: Discussionmentioning

confidence: 99%

Moral Signaling through Donations of Money and Time

Johnson¹,

Park²

2019

Preprint

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“…Participants were randomly assigned to one of the three scenarios: Worse Hybrid (WH), Better Hybrid (BH), and Dominant Hybrid (DH). Each participant was given a monetary endowment of $2 to allocate across the investment options available in their assigned scenario, with outcomes for each option presented in plain and consistent language (Berman, Barasch, Levine, & Small, ) . Social benefit was operationalized as the provision of iodized salt to poor populations, and all participants viewed a brief excerpt about its social welfare implications .…”

Section: Failure To Achieve Outcome Efficiencymentioning

confidence: 99%

Categorical cognition and outcome efficiency in impact investing decisions

Lee¹,

Adbi

Singh

2019

Strategic Management Journal

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Research Summary: The emerging practice of "impact investing" optimizes both financial and social outcomes, and thus promises to support hybrid organizations that simultaneously pursue financial and social goals. We argue, however, that impact investing decisions may be prone to behavioral factors that limit their outcome efficiency. In a portfolio allocation task designed to reflect the essential features of an impact investing decision, we find across a range of scenarios that individuals systematically fail to choose investment portfolios that achieve financial and social outcomes efficiently and thereby waste opportunities for value creation. We further show in online and inperson experiments that outcome inefficiency is related to "categorical cognition": suppression of categorical labels on investment options increases efficiency. Managerial Summary: The "impact investing" approach promises to encourage greater financial investments in hybrid organizations that pursue a combination of financial and social goals. We experimentally demonstrate a challenge of this approach: People struggle to identify portfolios of investments that simultaneously optimize across financial and social outcomes. This is partly due to "categorical cognition": a natural tendency to view investments in terms of known categories rather than the actual outcomes they produce. Our experiments show that removing the labels "for-profit company," "charity," and "social enterprise" from investment options-thus making it more

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“…Another explanation for why people donate ineffectively is that they do not know how to do so (the belief-based explanation, or "distorted altruist" explanation, see Berman et al, 2018). In support of this explanation, it has been shown that people give less to charities with high overhead costs because they suffer from the misconception that high overhead necessarily entails low cost-effectiveness (Baron & Szymanska, 2011;Caviola, Faulmüller, Everett, Savulescu & Kahane, 2014;Gneezy, Keenan & Gneezy, 2014).…”

Section: Introductionmentioning

confidence: 99%

The many obstacles to effective giving

Caviola¹,

Schubert²

2020

Preprint

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When people give to charity, they rarely give to the charities that do the most good per dollar. Why is this? One possibility is that they do not know how to give effectively. Another possibility is that they are not motivated to give effectively. Across six tasks (Studies 1a, 1b), we find that there is truth to both explanations. People have multiple misconceptions that affect the effectiveness of their giving, including about disaster relief, overhead costs, donation splitting, and the relative effectiveness of local and foreign charities. Similarly, they are unfamiliar with the most effective charities (Studies 2a, 2b). Debunking these misconceptions and informing people about the most effective charities makes them donate more effectively. However, to a certain extent people continue to give ineffectively even when informed how to give effectively. This is because they have preferences for ineffective charities: they want to donate to a charity they feel emotionally connected to even when they know that it is less effective. By contrast, members of the effective altruism movement, who are committed to effective giving, give effectively across all tasks. They neither have misconceptions nor preferences for ineffective charities (Study 3). Taken together, our studies show that only when people are both correctly informed and motivated to donate effectively will they consistently give to effective charities.

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Impediments to Effective Altruism: The Role of Subjective Preferences in Charitable Giving

Cited by 126 publications

References 30 publications

Moral Signaling through Donations of Money and Time

Moral Signaling through Donations of Money and Time

Categorical cognition and outcome efficiency in impact investing decisions

The many obstacles to effective giving

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