The behavioural science of donating to charity: Why we sometimes fail to do the most good we can, and what can be done about it

By JulianHazell @ 2020-12-23T00:23 (+8)

This is a linkpost to https://www.givingwhatwecan.org/post/2020/12/the-behavioural-science-of-donating-why-we-sometimes-fail-to-do-the-most/

Our brains sometimes do weird things.

We overeat even though we would like to be fit and healthy (I'm currently writing this article with a pint of Ben & Jerry's half baked ice cream sitting next to me), we smoke cigarettes even though we know that doing so is bad for our lungs, and we fail to save even though we wish to go on holidays and spoil our grandchildren when we retire.

Why?

Sometimes we do irrational things because we are susceptible to cognitive biases, which describe the mental processes that cause us to arrive at outcomes contrary to what standard logic would typically predict. One such bias is loss aversion — the reason why losing $100 feels about twice as bad as the equivalent happiness we feel from finding $100. Another is status-quo bias, which describes why we tend to leave things as they are even if the default option might not be the right choice (think of leaving the "yes you can send me promotional emails" box checked even though you know that the emails will probably annoy you later on).

Heuristics 101

Biases are sometimes by-products of heuristics — ways in which we simplify complicated problems so we can reach satisfactory results quicker than if we spend all day mulling over our options and calculating the probabilities involved.

Here's a semi-ridiculous example of a heuristic: Imagine someone places a yellow plate in front of you with some unrecognizable food on it. How would you figure out if the food is going to taste good? You could feel it with your hands (not recommended), smell it, compare it to images on Google, ask a friend, take a sample of it to chemically analyze, post a picture of it on Reddit, spend hours thinking about similar foods you've eaten — or you could just employ the 'well my mom used yellow plates when I was a kid and she's a pretty good cook' heuristic to save time. That might work 99% of the time. If you're eating at home, it becomes a no-brainer. When you see a yellow plate of food, it simply isn't worth the mental energy to worry about. Just dig in! But what would happen if I put a bunch of worms on a yellow plate and put it in front of you? You might start chowing down if your brain uses this shortcut, leading to an obviously bad outcome (the effectiveness of this vignette is based on the assumption that you do not like eating worms). See what I'm getting at?

Why we use heuristics

You're now probably wondering why we use heuristics if they can sometimes lead to bad outcomes. The reason is that heuristics may indeed have evolutionary origins and are sometimes very useful for decision-making. In this sense, they're features, not bugs. Even though these mental shortcuts might've kept us alive hundreds of thousands of years ago when quick decisions were needed to make sure we didn't starve to death or get eaten by larger, hungrier animals, heuristics can lead us astray now that we have access to Uber Eats and grocery stores.

The same logic applies when we make decisions about how much to donate and who should receive it. Thousands of years ago, it was probably okay to look around at our small social circles to decide who is deserving of our altruism. But now that we have the internet, we can send resources to those in need with a few mouse clicks and 23 or so taps of a keyboard. Yet our modern brains, and the heuristics that come with them, are still the same as they were thousands of years ago — at least physiologically. Because of this, many still choose not to donate at all, or only to charities they're familiar with regardless of how effective those organizations might be. This is a problem that heuristics are ill-equipped to solve.

When heuristics fail

One heuristic seems to be dangerously common in the world of charitable giving: the availability heuristic, which describes our tendency to use information that easily comes to mind when making decisions. The availability heuristic is why watching a news segment containing footage of a fiery plane crash might cause you to overrate the odds of getting in a similar plane crash, or why watching Jaws might cause you to similarly overrate the chances you get eaten by a shark the next time you go for a swim.

Charities that we only recently learned about or ones that we frequently hear about on social media might be easier for our brains to recall, but that doesn't necessarily mean they're better to donate to. By definition, charities are tasked with solving difficult problems that sometimes call for unintuitive solutions that only become clear after rigorous testing (if this wasn't the case, we hopefully would've solved these problems by now). Donating solely based on what comes to mind might cause us to exclude charities that we haven't heard of — ones that can be highly effective at creating good in the world, and ones that are in need of our generosity.

Out of sight, out of mind

It almost goes without saying that some of the things we can't see with our eyes are incredibly important (you're breathing in one of these things right now, actually). Since I don't own a microscope, I've never seen a SARS-CoV2 particle with my own eyes. Does that mean COVID-19 isn't a threat? I've personally never been to Sub-Saharan Africa. Does that mean there aren't important charities operating there that could use my donations?

To truly do the most good we can with our donations, we need to think beyond the things we see with our eyes by expanding our boundaries of moral concern to those who don't look like us, speak like us, or live near us (or those who aren't even alive yet). Home-country bias — which describes how investors tend to prefer investing in stocks within their home countries even if doing so leads to unbalanced portfolios — shows how bad outcomes can occur if we focus only on what is familiar or close to us. Why do we sometimes do the same with charity, especially when a dollar goes significantly further in low-income countries?

It seems foolish that familiarity causes the average US investor to park over 70% of their portfolio in US equities even though the US accounts for about half of the world's total stocks. The same kind of familiarity-driven thinking can explain why only 6% of the donations made by Americans in 2018 went abroad to other countries, which is about half the money the entire country spent on pizza that same year.

Something as important as preventing the suffering of other human beings requires us to make better decisions — and if we spend twice as much on pizza as we do on helping those in dire situations, we're currently in bad shape. Indeed, heuristics may not be the right answer for charitable decision making.

What can be done about it

All is not gloom and doom. Instead of relying on heuristics to donate, slow down your thinking so you can be scrutinous about where your donations end up. Often, the most intuitive answers that quickly come to mind are incorrect. A few hours of research can help you make more informed choices so your generosity can be even more effective at creating good in the world. I encourage you to think deeply about whether there are other charitable organizations out there that might be more effective at helping others than the ones you typically donate to. That way, you can be more confident that the availability heuristic and other pesky biases aren't interfering with your ability to do the most good you can. Beyond this introspection, here are some practical tips for being more effective with your charitable giving: