Unveiling the Joy of Giving: Millionaire vs. General Population Matching Experiment

1. The Joy of GivingEvidence from a Matching Experiment with Millionaires and the General Population René Bekkers Vrije Universiteit Amsterdam Ashley Whillans Harvard Business School Paul Smeets Maastricht University Michael Norton Harvard Business School Preregistration, materials, data, code, paper, posted at https://osf.io/bvs6t/

2. Does giving make donors happy? Donors Private benefit €  Intermediary organizations grants Match: x 2 programs Recipients Public benefit MBEPS

3. The Joy of Giving • The model of ‘impure altruism’ describes the benefit of giving to others (Andreoni 1989, 1990) Ui= Ui(xi, G, gi) • xi is consumption from the private good • G is utility from contributing to the charity’s output (pure altruism) • gi utility from the private gift per se (warm glow) MBEPS

4. Evidence for the Joy of Giving Mostly correlational • Robust correlation between giving and happiness • Reverse causality: happier people might give more • Third unobserved variable: e.g. wealth A few experiments, mostly in psychology • Small samples: mostly < 50 per condition • Special populations: often students • Mixed findings on mood effects of financial charitable giving MBEPS

5. Our contribution All Novel! • We use data from two large samples to test whether giving improves mood • We test how matching donations influence potential mood improvements from giving • Is mood improved by how much output the charity can create with the gift or by how much the giver sacrifices? • We also conducted the experiment among millionaires MBEPS

6. Design and pre-analysis plan • Pre-registration at https://osf.io/x69ds/ • Experiment in a representative general population sample (n = 1,232) from the Giving in the Netherlands Panel Survey (GINPS) • And among a sample of 771 millionaires in the High Net Worth GINPS oversample MBEPS

7. Experiment time line • Life satisfaction measure in survey ……….. • Between-subjects treatments (randomized) • No lottery: control group • Lottery: no match • Lottery: 100% matching of gifts ……….. • Mood measure MBEPS

8. Measuring the joy of giving • Pre-test life satisfaction: How would you evaluate your life in general on a scale from 1 to 10? 1 ‘very unhappy’ to 10 ‘very happy’ This question was included in the Giving in the Netherlands Panel Survey, among many other questions on charitable giving MBEPS

9. No Matching Group • After the survey, participants read: Among all participants in this survey we raffle five amounts of €100. If you are the winner, you can receive the amount in the form of a gift card, but you can also donate it to a charity of your choice. If you are one of the winners, would you like to: 1. receive €100 in the form of a voucher; 2. receive €50 in the form of a voucher, and give €50 to a charity; 3. donate €100 to a charity. Recipients were 12 popular charities in the Netherlands: Amnesty International - Doctors Without Borders (MSF) - Society for the protection of animals - Greenpeace - Netherlands Heart Association - Church in Action - National Cancer Foundation - Oxfam Netherlands - Stop Aids Now! – Unicef– Warchild - World Wild Life Fund - another charity, namely:……………………… MBEPS

10. Matching Group • After the survey, participants read: Among all participants in this survey we raffle five amounts of €100. If you are the winner, you can receive the amount in the form of a gift card, but you can also donate it to a charity of your choice. Attention: the VrijeUniversiteit Amsterdam doubles the value of your gift to charity. If you are one of the winners, would you like to: 1. receive €100 in the form of a voucher; 2. receive €50 in the form of a voucher, and give €50 to a charity; the VrijeUniversiteit Amsterdam increases this amount by €50, so that he charity receives €100 3. donate €100 to a charity; the VrijeUniversiteit Amsterdam increases this amount by €100, so that he charity receives €200. Recipients were 12 popular charities in the Netherlands: Amnesty International - Doctors Without Borders (MSF) - Society for the protection of animals - Greenpeace - Netherlands Heart Association - Church in Action - National Cancer Foundation - Oxfam Netherlands - Stop Aids Now! – Unicef– Warchild - World Wild Life Fund - another charity, namely:……………………… MBEPS

11. Measuring the Joy of Giving • Post-test mood: How are you feeling at the moment? 1 ‘Very bad’ to 10 ‘Excellent’ Mood and life satisfaction are strongly correlated: r= .59. The ‘joy of giving’ is the difference between post-test mood and pretest life satisfaction MBEPS

12. Donations by general population Χ2 (df = 2) = 10.6065, p = 0.005 p = .001 p = .069 p = .019 MBEPS

13. Competing hypotheses about the effect of matching on mood benefits from giving Ui= Ui(xi, G, gi) Matching • increases contributions to the public good: G goes up • signals the quality of the public good: U(G) + U(gi) go up • Increases social pressure: U(G) and U(gi) go down Effect may also depend on: • the agent’s belief about others’ giving(Andreoni, 1989) • the number of agents (Ribar and Wilhelm, 2004) • the level of output of the charity (Ottoni-Wilhelm, Vesterlund and Xie, 2017) MBEPS

14. General population: no match MBEPS

15. General population: match p (swl< mood) = 0.0416 MBEPS

16. How about millionaires? MBEPS

17. Donations by millionaires p = .258 p = .529 p = .564 MBEPS

18. Amounts donated +4% +41% p = .002 p = .391 MBEPS

19. Millionaires: No Match p (swl > mood) = 0.0216 MBEPS

20. Millionaires: Match Group MBEPS

21. Giving increases with endorsement of the moral principle of care MBEPS

22. Conclusion • Life satisfaction correlates positively with giving for the general population, but not for millionaires • Giving did not improve people’s mood • Matches increased donations in the general population, but not for millionaires • Matches did not improve people’s mood MBEPS

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27. Contact: René Bekkers Center for Philanthropic Studies Department of Sociology Vrije Universiteit Amsterdam r.bekkers@vu.nl Blog: http://renebekkers.wordpress.com Twitter: @renebekkers

28. No Joy of Giving n=216 students MBEPS

29. Two puzzles • Why do people give up a chance of winning a €100 to charity when their mood does not improve? • Why did the millionaires not respond to the match? MBEPS

30. Why does giving not result in mood benefits? • Guilt • Social pressure • Andreoni, Rao & Trachtman(2017) Avoiding the ask • DellaVigna, List & Malmendier (2012) Testing for altruism and social pressure in charitable giving • Exley (2015) people use excuses not to give • Outcome is uncertain • Kellner, Reinstein & Riener (2018) • Giving outside of the experiment (autonomy) • Smeets (2017) large number of requests for donations annoys millionaires • Impact of giving not clear • Aknin et al., (2013) • Giving improves life satisfaction or meaning in the long run, but not mood in the short run MBEPS

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32. Yes, we have regressions MBEPS

33. IV regressions (GMM) MBEPS

34. Matching: Who cares? • Matches usually increase the amounts charities receive, and more so than mathematically equivalent rebates. • Our hypothesis was that matches would not increase the satisfaction of donors. MBEPS

35. Prosocial Spending Research People seem most likely to derive happiness from giving experiences that provide a sense of free choice, opportunities for social connection, and a chance to see how the help has made a difference. MBEPS

36. Speculations • Giving is more satisfying when it is more costly and provides a certain benefit to a close other. • This makes giving to charity less hedonically rewarding than keeping or giving to a specific other person. • Mood benefits vary between donors: Effective altruists should care (more) about the impact of their gifts. MBEPS

37. The Joy of Giving n=19 women MBEPS