Charitable giving, social capital, and positional concerns

Charitable Giving

In 2005 charitable giving in the United States totaled over $260 billon, or around 1.9% of personal income, making it a significant fraction of the economy. Individual giving accounted for 77% of this total, while foundations accounted for 12%, bequests for 7%, and corporations for 5% (Giving USA, 2006). Almost 70% of US households report giving to charity. While the US typically has one of the...

Charitable Giving

(Un)Informed Charitable Giving∗

Evidence suggests little informed giving. To understand this behavior, we examine a model of charitable giving with costly information. We find that an individual who considers a smaller contribution is less likely to seek information, and thus the percentage of informed giving diminishes as the population grows. We also find that a direct grant to the charity exacerbates crowding-out by discou...

Testing for altruism and social pressure in charitable giving.

Every year, 90% of Americans give money to charities. Is such generosity necessarily welfare enhancing for the giver? We present a theoretical framework that distinguishes two types of motivation: individuals like to give, for example, due to altruism or warm glow, and individuals would rather not give but dislike saying no, for example, due to social pressure. We design a door-to-door fund-rai...

Identity in Charitable Giving

How does priming identity affect charitable giving? We show that individuals are more likely to donate when a facet of their identity associated with a norm of generosity is primed in an appeal. In large charitable giving field experiments run by the American Red Cross, appeals that prime an individual’s identity as a previous donor to the charity or as a member of a local community generate mo...