donation psychology

The Complicated Relationship Between Wealth and Generosity

Not long after Thanksgiving, I started to hear the ringing of Salvation Army bells outside of grocery stores. The persistent “clang” that arouses mixed feelings–generosity, guilt, joy, tinnitus…

donation psychologyThere’s no doubt that we live in a world where some people are better off than others. Countless charities exist to help people in need, with causes ranging from feeding the hungry, housing the homeless, and building infrastructure where it’s sorely needed.

But what makes us give our own money to help others? I’ve written about donation psychology several times on this site–I obviously find it a compelling question. Rationally, giving to charity would seem like a terrible idea. Parting with one’s own money and receiving nothing tangible in return? Humans, though, have an amazing capacity for generosity…sometimes.

One important factor in a person’s decision to donate is surely his or her own wealth and prosperity. The effects of wealth, though, aren’t that clear-cut.

Do Wealthy People Give More?

On the one hand, you might think that wealthy people are obviously the ones who will give to charity. After all, they have more money, so they’re in the perfect position to help others! On the other hand, though, maybe it’s the least wealthy who are more likely to give. They may be more able to empathize with those in need.

When you look at actual data, it can look like both patterns are true. First, a bunch of studies do show that the more money people have, the more money they donate. In fact, some researchers have taken to specifically studying the donation decisions made by millionaires.

The evidence isn’t always consistent, though. Some studies fail to find any relationship between income and giving. Other studies, however, show that lower class people can show greater compassion, which is in turn associated with being more charitable. Another clue to the wealth-generosity equation is to think about the proportion of one’s income that gets donated. From this perspective, the data actually show that lower income households donate a greater proportion of their income than higher income households.

Wealth and Mindset

It’s misleading to focus on the question: “Do wealthy people donate more or less than low-income people?” Clearly, people are capable of generosity across the wealth continuum. New research, though, suggests that the difference is in why people give.

Just like “Eastern” vs. “Western” culture affects how people think of themselves, social class has a similar effect. In general, higher class people think of themselves more as individuals. They’re focused on how they can be the makers of change–how they can accomplish their goals. (Psychologists would say they’re focused on “agency”).

Lower class people instead think of themselves more in terms of their relationships with others. They’re focused on the bigger picture and their connections with other people. (Psychologists would say their goals are more “communal”).

Different Strategies for Different People

charity psychologySince there are some key differences betwen wealthy and non-wealthy people, a charity might try a couple different strategies. New research shows that people donate more when the charity’s messages speak to what they care about.

In one study, the researchers set up two different ads for the organization, The Life You Can Save. One version focused on what you can do as an individual to help those in need. The other version focused on what we can do together to help those in need. It was a slight, but important, difference. After everyone saw the ad, they were given the option to click “Donate Today” or “Skip.”

This study couldn’t track whether people actually donated, but their choice to click “Donate Today,” which about 25% of people did, was a good indication. For lower income participants (roughly $50,000 or lower), people were more likely to click “Donate Today” if they saw the “we can help” version of the ad. For higher income participants (roughly $90,000 or higher), people were more likely to click “Donate Today” if they saw the “you can help” version.

As a follow-up, the researchers went up to hundreds of people in public areas and showed them one of the two ads. This time, though, people had a chance to donate actual money to the charity. The results were similar. Lower income people donated more when they saw the “we can help” message and higher income people donated more when they saw the “you can help” message.

Donation, Donation, Donation

Together, these studies from donation psychology paint an intricate picture of wealth and generosity. It’s not as simple as “wealthy people give more” or “lower class people give more.” Instead, the success of a charity’s message depends on who they’re targeting. By tailoring the message to the concerns of the audience (which is often a good persuasion tactic), a charity can be more effective.

In this case, focusing on the donor as an important individual works better when speaking to a wealthy audience. Focusing on the donor as part of a collective effort to help, however, works better when speaking to a less wealthy audience.

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