Does Logic Impair Philanthropic Effectiveness?

One of my favorite new (to me) blogs is the fantastically named Full Contact Philanthropy, authored by David Henderson, CEO of Idealistics Inc. and social enterprise consultant Dan Elitzer. In the wake my back and forth with Martin Brookes over the role of guilt in social investing, Dan left a comment that I want to share.

My objection to Martin feeling guilty about making a non-optimized charitable donation focused on the need for empathy in philanthropy to not be displaced by logic. But Dan took the argument a step further and argues that ignoring the empathic urge undermines philanthropic effectiveness.

Dan writes:

Rather than look at Martin’s gift as a betrayal of his social investment ideals, I think it is more productive to see it as a positive act of consumption and parenting. Instead of viewing his donation to the donkey sanctuary as replacing a more effective act of philanthropy, look at it as replacing the purchase of a toy or movie or other consumer product or service unconnected to charity. Certainly the joy he and his daughter received from his donation to the animal sanctuary was more “meaningful” than an equivalent amount of joy from some non-philanthropic activity.

I agree that the logical conclusion of Martin’s line of thinking would be that “we should all feel bad that we spend a penny on anything discretionary.” Inequality and injustice would cease to exist if we all felt compelled by the same moral compass that directs Martin. Unfortunately, we don’t all feel that way, and it is unproductive for people like Martin to spend too much time self-flagellating over such matters. Denying ourselves all “unnecessary” comforts does not lead to a mental state in which we are suited to effect good works on a larger scale. Granted, we all need to find the right balance for ourselves between absolute hedonism and strict abstention, but wasting too much time ruminating on the subject just prevents us from moving on with the important work we have to do.

To Sean’s larger questions about the role of guilt in the nonprofit sector and the obligation to right inefficiencies vs. giving with our emotions, I say we need to be aware of the role of guilt and other emotions (both rational and irrational) and better understand how they affect giving. Network for Good and Sea Change Strategies recently put out a fantastic (and free) ebook by Katya Andresen, Alia McKee, and Mark Rovner, which uses learnings from the discipline of behavioral economics to help explain why people so often make irrational decisions, especially when it comes to charity. The title is Homer Simpson for Nonprofits, and you can download it here. It offers actionable steps for nonprofits to better align their communications and fundraising strategies with the way people actually make decisions, not the way we think they SHOULD make decisions.

One of the principals discussed in the book is the relative strength of social norms over market norms. If we deny the role emotions play in philanthropy, we step away from effectiveness, not towards it. Rather than beat ourselves up when we give “inefficiently,” let’s strive to direct that energy to better understanding what led us to make that irrational choice and how we can better help our rationally preferred causes take advantage of the factors that drove us to give to our emotionally preferred cause.

Dan brings up the role of the emerging discipline of behavioral economics in helping us understand how people actually behave rather than how we think they should behave. Behavioral economics is a favorite topic of mine and one that I think can lead to great insights in philanthropy (I’ve just downloaded the eBook Dan points to).

As I work to craft the Tactical Philanthropy track at the Social Capital Markets conference, I want to follow up on the suggestion of Duke University’s Ed Skloot to include a session about what philanthropy can learn from behavioral economics. But I’m at a bit of a loss about how to structure such a panel and focus the conversation.

Do you have any thoughts about how to create a fantastic panel discuss about the intersection of behavioral economics and philanthropy? If so, leave a comment or shoot me an email!

One Comment

  1. I just got an email Stanford who recently hosted an event titled Small Steps, Big Leaps Briefing: The Science of Getting People to Do the Right Thing which essentially looked at the lessons in behavioral economics for giving.