Social Status as Driver for Altruism

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Yale is home to countless buildings named after benefactors – Bass Library, Sterling Memorial Library, and Harkness Tower just to name a few; and the institution has thrived under the donations of generous alumni patrons. But what impact does a promise of public recognition have on donations?

Two primary theories emerge from donating under this guarantee: some donate out of the desire to receive recognition and social standing, while others altruistically give in the hopes of encouraging others to do the same.

Professor Dean Karlan and his co-author, Margaret McConnell of the Harvard School of Public Health, first conducted a field experiment at Dwight Hall (Yale’s umbrella service organization) and then carried out a laboratory experiment to differentiate between the two theories.

Volunteers called 4,168 alumni in Dwight Hall’s donor database. These alumni were those who had a valid phone number and had yet to make a charitable contribution to the school. The 4,168 alumni were then randomly assigned to one of four treatment groups that asked:

(1) for a donation of $100,
(2) for a donation of $100, with the promise of name recognition in a newsletter as part of the Friend donor circle with a donation of $100,
(3) for a donation of $100, with the promise of name recognition in a newsletter as part of the Benefactor donor circle for a donation of at least $500, and
(4) for a donation of $100, with the promise of name recognition in a newsletter as part of the Friend donor circle with a donation of $100 and the promise of name recognition in a newsletter as part of the Benefactor donor circle for a donation of at least $500.

The Dwight Hall field study found that mentioning the newsletter name recognition increased the likelihood of a gift $100 or greater by 1.8% and the possibility of a gift of $500 or greater by 0.5%. The researchers also found a positive, though not significant, increase in the probability of a donation that was below the qualification level for newsletter recognition.

Karlan and McConnell then separated the two theories of what truly motivated the donors through a lab experiment conducted with the Yale University’s Behavioral Lab. They concluded that the experiments “provide clear evidence that social status, and not pure altruism, is an important driver of charitable giving.”

The researchers emphasized that the motivation for donation may blur between reputation and altruism, and that the challenge in differentiating between selfless and status motives is potentially “crucial” to the success of fundraising under the promise of public recognition.

At Yale, these findings could be part of the reason for the incomplete funding for the two new residential colleges up Science Hill. After administrators stated that they did not wish to name the new residences donors in 2011, fundraising slowed down.

With this in mind, perhaps more philanthropic organizations will adopt fundraising strategies that promise recognition in an effort to gain contributions.

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Sharon Yin is a junior in Davenport. Contact her at sharon.yin@yale.edu.

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