The Factors Responsible for the Distribution, Size, and Frequency of Charitable Donation

Charity is a practice which enables people to support specific causes, associations, institutions and individuals by making occasional and/or regular charitable donations. In spite of its altruistic and non-profit nature, charity giving is a very large market which has caught the attention of numerous experts who have attempted to determine why people choose to donate and what factors affect the distribution, size and frequency of their donations. (Kolm, S. C. and Ythier, J. M., 2006) Even though corporations and foundations account for a significant percentage of charitable donations, recent statistics suggest that the majority of gifts come from individual givers, with the United States and Britain being the countries with the highest number of donors in the entire developed world (as of 2005).

(Charities Aid Foundation, 2006) As for the causes and fields which are more likely to attract donations, during the past few years medical research, children, animals, cultural and religious causes/institutions have become the main recipients of charitable gifts in both the United States and Britain.

(Core, J. E. and Donaldson, T., 2010; Charities Aid Foundation, 2012a)

In view of these considerations, this essay will use a combination of previous academic studies and statistics to determine whether personal values are the only factor that is responsible for the distribution, size and frequency of charitable donations from individual givers. A real-life case will also be presented in order to evaluate the effectiveness of charities’ marketing campaigns. During the past few decades, the charity market has grown exponentially in most developed countries, thus encouraging economic theorists to explain the reasons behind its existence and growth by applying traditional economic models.

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(Kolm, S. C. and Ythier, J. M., 2006)

However, being charitable giving a humanitarian practice which entails social and psychological mechanisms, traditional economic models cannot possibly provide a clear and broad understanding of the reasons why individuals make charitable donations (Oppenheimer, D. M. and Olivola, C. Y., 2010). In fact, as a tool which enables individuals to help others out of compassion, generosity and altruism, charity should be mainly analysed from an ethical point of view. In this regard, Kolm and Ythier (2006) pointed out that all human beings’ nature are characterised by a strong moral component, which is the main reason why people decide to donate and help others without receiving anything in return. Therefore, it follows that moral values have a major impact on how often and how much individual givers choose to donate to specific causes.

The above statements are supported by a recent study conducted by Charities Aid Foundation (2012), which revealed that ethical considerations, personal values, beliefs and life experiences are among the main motivators which encourage people to donate to specific charities and causes. In other words, those who strongly believe in medical research will be more likely to donate to medical charities, whereas religious people will prefer donating to religious institutions and so forth. According to this line of argument, the amounts that individual donors give to charity also depend on their values and moral codes. In this regard, Kolm and Ythier (2006) pointed out that the main reason why charitable giving has a strong moral dimension is because unlike ordinary organisations, charities allow donors to experience a sense of solidarity and to share their personal values and beliefs with others, thus satisfying their moral needs.

With regards to the origins of such moral needs, O’Halloran (2011) observed that the personal values and beliefs that encourage donors to help others have both an experiential and historical dimension. In fact, while individuals may develop an interest or even a moral need to make charitable donations as a result of personal experiences and independent ethical considerations, it cannot be denied that since feudal times both religious and secular leaders have encouraged individuals to see charity as a responsible, rewarding and even divine practice. (O’Halloran, K., 2011) Therefore, it could be argued that even if individual givers’ personal values were the only factor affecting the distribution, size and frequency of charitable donations, their historically-proven vulnerability to external forces suggests that they should be analysed in relation to both ethical and non-ethical factors.

In this regard, a study conducted by Sorensen (2004) revealed that there are specific motives which encourage people to commit to charity. By comparing and analysing a series of philosophical and logical observations, he came to the conclusion that personal values have a major impact on individual givers, who use “charity” as a means to maximise and spread their true beliefs, at the expense of “false” ones. (Sorensen, R., 2004)

In view of Sorensen’s (2004) findings, it could be inferred that the reason why religious charities keep attracting surprisingly large donations is because donors wish to spread and promote their religious beliefs out of egoism, rather than altruism. (Charities Aid Foundation, 2006) However, as Kolm and thier (2006) pointed out, although personal values certainly affect people’s giving habits, social and community pressure should be taken into consideration when analysing the motives behind charitable donations, especially religiously-motivated ones.

The above claim is supported by a recent study conducted by Della Vigna et al. (2012), who argued that individual givers are motivated by two main factors, namely personal values, intended as altruism and goodness, and social pressure. Della Vigna et al. (2012) investigated the relationship between social pressure and charitable donations by distributing flyers which informed householders that a fundraiser would have stopped by at a specific time to request a donation. According to their findings, a high percentage of households which had been informed about the fund-raiser’s visit did not open the door, whereas households which had not received any prior notification were more likely to open the door and make donations. (Della Vigna, S. et al., 2012)

In light of Della Vigna et al. ‘s (2012) findings, it can be inferred that a significant percentage of donors, would probably refuse to make donations if it wasn’t for external pressure and solicitation.

However, research has revealed that social pressure isn’t the only external factor that affects the size, distribution and frequency of donations. According to Loseke (1997), for example, one’s upbringing, education and inculcated habits can affect their attitude towards charity. Data suggests that families are usually responsible for individuals’ giving habits, as numerous children become aware of the importance and long-term rewarding nature of charity by their parents. As a result of that, the education in donating is preserved and a significant percentage of children end up becoming adults who believe in the power of charity and donate to charity organisations. In view of these observations, Loseke (1997) argues that charity is nothing more than an idea which can be constructed and reinforced by external forces, such as family, society and the government.

Therefore, the aforementioned studies indicate that even though personal values and beliefs have a significant impact on individual givers’ donating habits, they may still be influenced through social pressure, solicitation and, of course, sensitisation to specific issues. To be more precise, charities can use various techniques to make the general public aware of their causes and initiatives and to attract donors. For instance, Cancer Research UK (2014a) is a charity organisation whose main goal is to support research in order to cure and defeat cancer. Its recent ‘One day we will beat cancer’ campaign uses a combination of emotional appeals, proximity and transparency to ensure that the public is aware of the seriousness of cancer and feels deeply involved in the research carried out by Cancer Research UK.

A video has been broadcast in the United Kingdom and shared on the charity’s official website, as well as on YouTube and other social networking websites, which aims to make viewers understand how cancer can change people’s everyday life, what progress has been made thanks to donors and the positive impact that the discovery of a cure would have on cancer victims, as well as mankind. (Cancer Research UK, 2013)

The aforementioned is achieved through a video advert which presents a story wherein cancer is a villain that needs to be defeated, researchers are heroes and ordinary people are the main characters can beat cancer by supporting research. The main messages conveyed through the ‘One day we will beat cancer’ campaign are both optimism and realism, as in spite of the pain and losses caused by cancer, the charity emphasizes the fact that humans will triumph eventually. (Cancer Research UK, 2013)

Cancer Research UK’s campaign is certainly effective and engaging as it gives individuals the opportunity to support an important cause and informs them about the real effects of cancer and how their funds can help researchers to develop new cancer treatments. (Cancer Research UK, 2014) Therefore, by providing information about the progress that has been made thanks to donations and emphasizing researchers’ commitment to defeating cancer, Cancer Research UK certainly satisfies donors’ need for proximity, temporal distance and transparency. (Core, J. E. and Donaldson, T., 2010) Moreover, some of the images and messages contained in the ‘One day we will beat cancer’ campaign were certainly chosen in view of their strong emotional impact on both existing and potential donors, as they stress how urgent it is to beat cancer as soon as possible, thus exerting a certain amount of pressure on viewers.

As far as personal values are concerned, these are usually static and shaped by the cultural environment in which people are born. (Rao, C. P., 2012) As Rao (2012) pointed out, family, religion, school, institutions and work are the factors which are most likely to shape one’s personal values, which means that it would be nearly impossible for a single marketing campaign to attract donations by controlling or even changing individual givers’ values. However, charities can maximise their campaigns’ effectiveness by taking into consideration their target audience’s needs, desires, beliefs and values.

Cancer Research UK uses empathy and hope to address two very common personal values, namely self-interest and altruism, as even though most viewers may be perfectly healthy, cancer is one of the world’s main causes of death, which means that there is a chance that they may develop it too sooner or later. (WHO, 2014) In light of the studies and theories analysed in this essay, it can be inferred that personal values have a major impact on the size, distribution and frequency of donations. That is because the cultural environment in which people are born tends to shape their personal values, thus encouraging them to support specific causes, such as religion, medical research, poor people and so forth.

However, research has revealed that people’s given habits can be affected by a number of factors, such as external forces, social pressure, self-interest, “egoism” and solicitation, which means that charities can use certain techniques and methods to attract more donors. In this regard, Sorensen (2004) pointed out that numerous people use charity as a means to support their personal values, whilst spreading them at the expense of false beliefs. Similarly, Core and Donaldson (2010) came to the conclusion that practical factors, such as proximity and temporal distance, play a fundamental role in affecting individuals’ giving decisions. Therefore, it follows that charities can increase their chances of attracting more funds by developing campaigns which appeal to common personal values, including altruism and self-interest, whilst addressing practical considerations, such as proximity, urgency, temporal distance and civic/social participation.

References

1. Charities Aid Foundation (2006). International comparisons of charitable giving November 2006. [online] Available at: http://www.cafonline.org/pdf/International%20Comparisons %20of%20Charitable%20Giving.pdf> (Accessed on 19 May 2014)
2. Cancer Research UK (2014b). Donate. [online] Available at: http://www.cancerresearchuk.org/support-us/donate> (Accessed on 20 May 2014) Core, J. E. and Donaldson, T. (2010). An Economic and Ethical Approach to Charity and to Charity Endowments. Review of Social Economy, Vol. 48, N. 3 Della Vigna, S. et al. (2012). Testing for Altruism and Social Pressure in Charitable Giving. The Quarterly Journal of Economics, Vol. 127, N. 1, pp. 1-56 Kolm, S. C. and Ythier, J. M. (2006). Handbook of the Economics of Giving, Altruism and Reciprocity: Applications. Oxford, U.K.: Elsevier Loseke, D. R. (1997).
3. The Whole Spirit of Modern Philanthropy: The Construction of the Idea of Charity, 1912-1992. Social Problems, Vol. 44, N. 4, pp. 425-444 O’Halloran, K. (2011). The Politics of Charity. Abingdon, Oxon: Routledge Oppenheimer, D. M. and Olivola, C. Y. (2010). The Science of Giving: Experimental Approaches to the Study of Charity. Oxon, U.K.: Taylor & Francis
4. Rao, C. P. (2012). Marketing and Multicultural Diversity. Surrey, U.K.: Gower Publishing Sorensen, R. (2004). Charity Implies Meta-Charity. Philosophy and Phenomenological Research, Vol. 48, N.2 WHO (2014). Cancer. (online] Available at: <http://www.who.int/mediacentre/factsheets/fs297/en/> (Accessed on 18 May 2014)