Imagine that you're running a charity. Suppose you have evidence showing that your charity is highly effective - that you are really making a difference in people's lives. In your fundraising campaign, should you emphasise how effective you are?
In a new study, Yale University economist Dean Karlan and Clemson University economist Daniel Wood offer a surprising answer. It turns out that large donors respond positively to statistical evidence of effectiveness - but small donors respond negatively. There's a major lesson here for the charitable sector, and the lesson has implications for other activities and institutions, including political campaigns, health education and various businesses.
Many people give emotionally, and almost automatically. For some of us, giving produces a kind of warm glow, and we give in part because we want to enjoy that glow. To warm-glow givers, numbers don't much matter. If a charity wants to reach them, it would probably do best to provide photographs or a moving narrative about a needy child or family.
Other people give money because of their judgement that, all things considered, certain charities will significantly help people. Donors of this kind are willing to do at least a little calculating. They won't necessarily do a lot of homework, but they care a lot about whether their money is being put to good use.
This distinction between the two kinds of givers corresponds to the psychologists' distinction, elaborated at length by Nobel Prize winner Daniel Kahneman, between two ways of thinking: fast and slow. Fast thinking is intuitive and emotional. When people are thinking fast, visual images are important. Slow thinking is more deliberate. When people are thinking slowly, numbers count.
Dr Karlan and Dr Wood contend that large donors are more likely to be slow thinkers, focusing on the actual effects of their donations, whereas small donors are faster thinkers and more likely to be reacting emotionally. The researchers know that this is not the only possible explanation of their finding; for example, large donors might be more educated and therefore more likely to focus on statistical evidence of a positive impact. But their preferred explanation is consistent with a growing body of evidence that when potential donors are presented with statistics and numbers - for example, how many people might be saved or are at risk - their willingness to give tends to decrease.
In recent years, many people have been trying to evaluate the real-world effectiveness of various charities. These evaluations are important, but if a charity wants to attract small donors, it might be a mistake to highlight them,. For charities, as for institutions of many different kinds, the central lesson is clear: Statistical information might have a major impact on some people, but to others, it might be irrelevant - or even counterproductive.
Thoughts:
- I believe that there are a number of needy Singaporeans who are either not aware of the help available or do not wish to seek help for what so ever reasons.
- For those who are not aware of help, the challenge is for the Government to make the information on social assistance available to them, but yet not portraying a state of social welfare-ism.
Thoughts anyone?
Yours,
Something Small Thinking Big
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