CHARITABLE DONATIONS WILL NOT MAKE UP FOR PUBLIC SPENDING CUTS:
NEW EVIDENCE ON ‘WARM GLOW’ VERSUS ALTRUISTIC MOTIVES FOR GIVING
People’s donations to charity are motivated by both a genuine passion for the service being provided and the ‘warm glow’ feeling that comes from giving generously. On average, these two factors each account for half of why people give to charity.
That is the central finding of research by Mirco Tonin and Michael Vlassopoulos , presented at the Royal Economic Society ’s 2011 annual conference. The results imply that the loss of public funding to charities in the current economic climate will not be fully recovered by private donations.
The study gave people £10 to allocate between themselves and a charity of their choice in two different scenarios. In the first scenario, they know that the researchers will top up the donation to £10 regardless of how much they donate. Here, the average donation was £2, suggesting that this money was donated purely because it made people feel good about themselves – not because it would help the charity any more.
In the second scenario, the researcher does not top up the donation. This time the average donation was £4, suggesting that the extra £2 was motivated by altruism towards the charity. These results imply that the two motivations are roughly equal.
Charities are currently experiencing a substantial reduction in government funding at a time when many causes are at their most needy. If charity donations were entirely driven by altruism, charities could expect private donations to make up the shortfall. But this research suggests that a lot of the cuts will go uncovered.
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Charities are experiencing a substantial reduction in government funding due to the public spending cuts. Does this mean that they will have to cutback in a moment when there is increased demand for their services due to the difficult economic situation? Will they be able instead to make up for the shortfall in their budget through increased donations made by the public?
To answer this question it is necessary to understand what motivates people to give to charities. It is possible to distinguish between two main motives for giving:

People may give to a charity because they care about the public good that the charity is providing or about the well-being of the people who benefit from the charity
’s activities. This type of motivation is called ‘pure altruism’.

People may also give because they enjoy the act of giving in itself. They may indeed derive a ‘warm glow’ from the feeling of being good and generous.
This distinction is important to understand whether or not charities can expect private donations to compensate for the departmental spending cuts. If people are mostly motivated by purely altruistic motives when giving to charities, then they will react to a cut in public funding by increasing their own donations. If people are instead giving mostly because of the ‘warm glow’ they receive when acting generously, then they will not necessarily increase their donations to compensate for the cuts in public transfers.

This research uses experimental methods to address this issue. What the study finds is that pure altruism and warm glow motives are roughly equivalent in motivating charitable donations. This implies that charities cannot expect private donations to compensate fully for the fall in public transfers.
In particular, in the research design, each participant can allocate £10 between himself and a charity of his choice in different experimental treatments. In one treatment, aimed at measuring warm glow giving, the charity receives a total of £10 regardless of what a participant decides to donate, as the experimenters top-up any individual donation.
Participants on average give £2 in this treatment. Given that the amount received by the charity is fixed, donations cannot be due to pure altruism towards the charity.
The research design also makes it possible to exclude those participants whose donation could be confounded by altruistic or reciprocal motives towards the experimenters. Then, the researchers manage to measure the strength of warm glow motives in charitable giving.
In another treatment, the charity receives what the participant donates. Here, the average donation is £4. In this treatment, both pure altruism and warm glow motives are present.
By comparing donations in this treatment to donations in the previous treatment, it is possible to isolate the amount of donation due to pure altruism. The study finds that donations due to the two motives are roughly equivalent.
This project has been funded through research grants from the British Academy and the ESRC.
ENDS
‘An Experimental Investigation of Intrinsic Motivations for Giving’ by Mirco Tonin and
Michael Vlassopoulos, Economics Division, School of Social Sciences, University of
Southampton
Contact details:
Mirco Tonin
Email: m.tonin@soton.ac.uk
Mobile: 07824 712760