Rich givers motivated by direct results, less wealthy donate to help collective: study

Dene Moore
National Affairs Contributor
Rich people are more likely to donate to charity if they can evaluate the return on investment, according to a new study. Photo from Getty Images

Canadians rank among the most generous people in the world when it comes to charitable giving, and this time of year tends to spur an altruistic spending spree.

But what moves us to give? Who is more generous — those who have more or those who have less?

That depends, according to new research.

“It should seem obvious: people with more should be more generous, but there is some research showing that those who make the most actually donate less of their money to charity,” said Ashley Whillans, a PhD candidate in the School of Psychology at the University of British Columbia and author of the study, published this month in the Journal of Experimental Social Psychology.

She asked more than 1,000 working adults about giving, to see the effect of different types of messaging in encouraging or discouraging donations.

“Most charitable giving is really focused on what we can all do together to help a cause. It really focuses not on the individual but the collective,” Whillans said.

But the study found that the most effective appeals were different among different socio-economic groups.

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“What we found is that wealthier individuals in our sample were much more likely to donate and intend to donate to a poverty-relief organization when the messages were focused on what they could do to make a difference,” she said.

“Whereas the less wealthy individuals were more likely to give when the message focused on what we can all do together to help.”

She hopes it might help charities to tailor their messages to potential donors.

In another study published earlier this year, Whillans looked at the physical effects of charitable giving.

She handed out small sums of cash weekly and randomly assigned participants to either spend the money on themselves or on others over a three-week period.

Over that time she measured specific health indicators.

“We saw that participants who were assigned to spend money on others showed significant reductions in blood pressure over the course of the study,” she said.

It was not a small reduction.

“These benefits were comparable to starting a new aerobic exercise program,” Whillans said.

Numerous studies have proven the health and happiness benefits of altruistic giving, she said.

“In one paper we found that spending money on others can lead to significant benefits to happiness, as compared to spending on oneself, and that’s particularly true if we know exactly how our dollars have made a difference to the cause,” she said.

“Charitable donations can have substantial impacts for health as well as happiness.”

But people tend to underestimate these benefits, she said.

Jeff Cornett, chief marketing and philanthrophy officer for Plan Canada, says Canada ranks among the top givers, globally.

“We have a vibrant economy compared to many other countries around the world so Canadians are very generous and we do have a rich and wonderful tradition of giving,” he told Yahoo Canada.

According to a Statistics Canada report released in April, 82 per cent of Canadians made financial donations to a charitable or non-profit organization in 2013.

That’s a small decrease of two percentage points from 2010, but those donors gave more. From 2010 to 2013, the total amount donated by Canadians increased 14 per cent to $12.8 billion.

About 90 per cent of Plan Canada’s donations are via child sponsorships, which offer a one-on-one relationship between the donor and recipient.

But the group sees a significant bump in donations this time of year, Cornett said.

The annual Gifts of Hope catalogue, where shoppers can purchase supplies for under-developed areas of world on behalf of gift recipients, brings in about $8 million annually.

“It makes the best use of the holiday spending sprees that happen at this time of year,” Cornett said.

A recent study conducted by public relations firm Hill and Knowlton for Plan Canada found that two-thirds of Canadians feel it’s important to give back, especially at this time of year.

“The other one we’ve seen in our results, but it’s nice to see in the research, is that one-third of Canadians felt they would rather receive a herd of goats that a computer,” he said.