Philanthropy: altruism or reciprocity - or why do people give to charity?

I attended a workshop this morning at the NCVO annual conference entitled "Is Philanthropy the solution to funding the Big Society? ". With my researcher hat on, I spend plenty of time comparing various ways of measuring the level of giving, but perhaps not enough time thinking about why people are giving. Why do people give to charity?

From the discussion today it seems there are two diverging schools of thought about the nature of giving - one highlighting reciprocity, and the other favouring altruism. This is not just navel gazing - these are two very distinct psychological underpinnings, and have implications for how charities should go about asking people for donations, and how policy makers should go about encouraging giving.

The foundations of modern economics focus very strongly on consumer behaviour - explaining the choices that people make between which goods and services to purchase and how much to pay for them in terms of what set of choices makes them the happiest, and hiding this insight behind complicated maths.

We can use this framework to explain the two competing theories of philanthropy - if reciprocity is the dominant reason for giving, what makes philanthropists happiest is knowing about what they are getting in exchange for their donation. If this is true, we should focus on things like measuring how much money could be saved by charitable work with young offenders, and offering more credit and recognition for major philanthropists

If however altruism is the key driver for giving - happiness is derived from giving away money without thinking too much about what you are getting back. If this is your motivation, too much detail, measuring impact, and couching giving in investment language could actually decrease the level of donations. Donors motivated by altruism will be more engaged by broad ideas of "giving something back", and perhaps a wider sense of duty or obligation to society.

To further complicate matters it is likely that some donors will be engaged by the reciprocity approach, and some will be motivated by altruism. And as one of the panelists put it (think this may have been Michael Edwards but possibly Michael Shepley) the decision of whether or not to give to charity might come down to what do you value more - a new Mercedes or giving £50,000 to help people in need?

The panel of course touched on many broader topics than this, but this is what stuck in my mind. All the panelists whose ideas I am crudely misrepresenting are listed at on the NCVO annual conference blog

Well, today has certainly got me thinking. I'm off to read the government's Giving green paper again - which if I remember comes down firmly on the reciprocity/exchange side of things.

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