Thu, December 02 2010

Science of Giving 2: Which makes people happier - giving or receiving?

Katya Andresen's avatar

Author, Robin Hood Marketing

Filed under:   Fundraising essentials •

All month, I’m blogging the fascinating book, The Science of Giving, which covers a range of seminal studies about giving psychology.

Today’s topic: research by Michal Ann Strahilevitz on how people value giving vs. receiving - and what this means to fundraisers. It’s a highly technical read, but there are important insights, like these:

1. Why do we give anyway? It’s irrational to fork over money we could be spending on ourselves! Answer: because there are emotional benefits:

-donating gives a warm glow of pleasure
-it makes us feel better about ourselves
-it helps us avoid feeling guilty
-it preserves our self-image

2. Are we happier when we give one big amount or a lot of smaller amounts?

The emotional benefits of giving are highest when we spread out giving into separate experiences rather than doing it once (the sum of each positive experience is bigger than the high of one gift). Even business students who understand the time value of money preferred to give money away in increments over a year rather than all at the year’s start (best for the charity) or year’s end (best for the giver). This is a big finding because it underlines just how important are recurring gifts! Let donors sign up to make small contributions over time - they will feel happier, which we know from yesterday’s post means more giving.

3. Which do we like better - giving or receiving?

This part of the study is highly technical, but the findings are pretty clear:

-We feel good when we give and receive, but both have diminishing marginal value
-Receiving and giving both make us happy, but neither is a substitute for the other
-Combining the value of receiving and giving is perhaps more beneficial than combining receiving + receiving or giving + giving. The research seems to show people would rather find $50 and raise $100 for their charity rather than giving twice or having two windfalls. I was with Strahilevitz on that but then the author suggested this means combining good feelings of giving and receiving into one transaction could be a great idea. But there isn’t the giving research in the study to back this up -plus this partly contradicts the study research I discussed in yesterday’s post, which said emphasizing self interest makes people less generous. So I wouldn’t go about sending a bunch of presents to your donors. But you could gift them with happy feelings of giving or accomplishment if they did something like walk ten miles for your cause. This finding does suggest why cause-related marketing works well - because we are buying something for ourselves AND giving to others, creating two good feelings.
-The relationship between how good we feel about receiving something for ourselves and how much we receive is stronger than the relationship between how good we feel about giving and how much we receive. That’s because it’s easier to see the difference between spending $100 vs. $1,000 on ourselves than it is to to see the difference between giving $100 vs. $1,000 on a good cause. I agree - but darn it, it doesn’t have to be that way! If we were better at helping people witness the difference they made, this wouldn’t be a problem. I completely agree with the author, who says we could be raising more money if we improved the connection between the magnitude of the donation, its impact and the feelings of happiness that result. Amen to that.

4. What is the link between giving time and money?

-People who volunteer time are more likely to give - and to give more.

Finally, Strahilevitz makes the following great point:

Most fundraisers probably don’t think of themselves in the business of selling happiness to donors, but that is ... their job.

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