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The science of giving


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October 03, 2014
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The science of giving

lm-the-science-of-givingPhilanthropy has gained ground in India over the last few years with young people seeming to take a far more active interest in giving

Mumbai: Philanthropy has gained ground in India over the last few years with young people seeming to take a far more active interest in giving.

What is leading to this societal change and what is the science and psychology behind giving? Dhaval Udani, chief executive officer of GiveIndia, an online donation platform, and Biju Dominic, CEO and co-founder of behaviour architecture firm FinalMile Consulting, discuss how altruism has evolved over time and why people give. Edited excerpts:

Udani : We are definitely seeing younger people becoming more involved in philanthropy and more interested in doing something about it: both from money perspective as well as an activity perspective.

As an example, we do a payroll giving programme, and the team had gone to a certain company. When they came back, I asked why we had so few sign-ups at such a small monthly value. They actually said that “we were meeting older people today and we were meeting younger people the last few days”. That was a reaffirmation to me that the younger generation is getting more and more involved in these activities.

Dominic: I’m curious to know whether there is any evidence to suggest that the percentage of money going into altruistic activities as a percentage of total income is increasing.

Udani: It would be very difficult to say whether money spent on altruistic activities as a percentage of total income has gone up. But the number of people contributing, just the volume, I certainly see an increase in that. As a result, the value of total contribution as a result is also definitely increasing. It’s difficult to say whether percentages are increasing for evolved people. But just because you have suddenly seen a large number of people joining the giving movement, the averages may not tell the same story.

Dominic: From a science point of view, one of the things they say is that altruism was very common when we were in a smaller group. In smaller groups, what really drove altruism was taking care of our own relatives, our own kin. In this scenario, obviously, reciprocity and the benefits that accrued were very important.

Obviously, in a large group, it’s not possible to see that kind of reciprocity. So I was wondering what is really driving this new movement of altruism. And one of the things we do in our projects is to look for positive deviances and try to build on them. So I am trying to understand, other than fact that young people have come in, what has helped the movement? Has communication helped? Or has something else helped?

Udani: One of the questions that I often get asked is what is new in the world of philanthropy and how has it evolved.

I think that’s a question that assumes that everyone is at the same evolutionary level when it comes to philanthropy and that is certainly not true. The way I have absorbed it is that people move through various evolutionary levels of giving. Some move through every level, some may skip certain levels. But there is certainly an evolution in the manner in which a person goes through that activity. For example, what we tend to see is that initially when people start to give, they give as a way of guilt reduction. But as they start doing that, they realize that is not enough. So then they start to think that they also need to make an impact and help a beneficiary. As a next step, people will look at leveraging their spend and consider investing in capacity building of an organization as a way to make a bigger impact.

So I see that people move through these stages of giving over a period of time.

Dominic: The reason I asked is because if you purely look at the bigger picture, even classical economics suggests that it is unlikely that people are going to donate much money because they say that self-interest is at the core of everything we do.

Darwin comes and says it’s all about the survival of the fittest. What came as a surprise to me was some of the recent neurological studies in this area which said that our brains are actually hard-wired for giving. When we give something, our reward areas are actually lighting up and a lot of dopamine and oxytocin is getting released.

So then the question is that if we are already hard-wired to give, then why aren’t we doing this as second nature. We know that whenever there is a reward system, then you tend to do the same thing again and again. Or are there certain barriers that we ourselves have developed that prevent us from doing this (giving)?

In the catholic church, for example, there is a rule that 10% of their income has to be given to the church. But I don’t think that happens, despite this being a rule. So that means that somewhere people are saying that they are not willing to give and I’ll keep the money with me.

If you go back thousands of years, anyone who didn’t share was almost seen as committing murder. So we probably grew up thinking of this as something that was forced and hence it got hard-wired. But it looks like from that stage to where we are currently, things have changed. Maybe because in the current vast world, even if you don’t give, there are no repercussions.

My feeling is that there are a lot of people who can give but they are not giving. So my belief is that this is one of the areas where you need behavioural change to narrow the gap between the amount of giving right now and the potential for giving.

Udani: I agree with that. But all I am saying is that we are on the right path. When you say that people work with inherent self-interests in mind, I think there is an inherent self-interest in giving as well. You talked about the oxytocin getting released and the nerve centres getting stimulated, all of that does happen. So you are actually doing it for your own happiness. The problem is that is an intangible gain. It’s also not something that is talked about enough. So people would not have heard their friends say that giving made them happy. It is also not considered wise to say that giving makes me happy. You are supposed to think of giving as something that helps the beneficiary. But it can do both things.

Also, unfortunately, a lot of our giving is also anonymous. And I say unfortunately because you can’t experience everything in life yourself. Sometimes you have to hear about the experience from other people. So if you hear from someone that “giving made me happy” or “giving made a difference to my life”, a lot of other people will also do it.

People want role models who they can follow. Just like any other industry, philanthropy needs a hero. It needs people to come out and say that “we are giving and we enjoy our giving”; which is why I say that this movement picked up four-five years ago, because it was then that Warren Buffet and Bill Gates had come down to India and after that there was suddenly an increased focus on philanthropy and that made a big difference.

Dominic: You spoke about the happiness of giving and I think a lot of people don’t realize that. If you look at social psychologist Daniel Gilbert’s work, he has quantified that that is actually one of the highest levels of happiness. So if people actually come to know about it, that will help.

If you see some of the work done by economist Robert Shiller, he has spoken about the fact that if people know where exactly the money is going in, that will help create better altruistic behaviour. One of the things that we have realized is that while asking people to give, if you give them a choice, that helps improve the participation. So there are different approaches to increasing the amount of giving.

Udani: What we have also observed is that when people get joy out of their giving, people will give more and more.

Social pressures may play a role to start with and that’s OK but it’s important that they enjoy it after that. If they don’t enjoy it, they will either stop giving or not scale it up to potential. Also, you have to make sure that giving does not happen for the wrong reasons, such as a way of improving your social quotient, when you worry less about impact and worry more about what you can get out of it.

I think for us, we have to focus on how we can help people in their giving. I think it’s very easy for people...to say that people are not giving, so there is nothing we can do. But I think we ought to question what we can do to make this happen.

Dominic: That’s the point I wanted to highlight. Some of the research shows that people will give more if they are told of the specific impact it will make rather than just that it will help reduce poverty.

So you can be more specific, say, about the village where money may be going by showing photographs and explaining the actual impact that the money will have.

Earlier we were being altruistic when we were face to face in a group, but now that we don’t have that, we have to compensate for that. We also realized that giving a choice is important as it helps the decision-making process.

Udani: Donors are certainly very interested in knowing how their money was spent and where it was spent. Donors who donate through GiveIndia.org first choose exactly what programme their money should be donated towards. While choosing the programme, they know what their money will be used for and are able to see a sample feedback report to see how it will be reported. Having made a choice of the cause, they eagerly anticipate getting the feedback reports to ensure the money was spent as mentioned on the website.

We have also observed that donors like making a choice. We had run an interesting experiment a few years ago wherein we allowed donors to simply donate without choosing a specific programme amongst the list of 1000+ programmes of over 200 NGOs (non-government organizations). A miniscule number of donors (1%)chose to just give the money without specifying its end use. That clearly shows that if given the option, people will want to donate towards a cause of their choice and actively seek making that choice.

Dominic: There are some other interesting pieces of research, from an evolution perspective, it was not just reciprocity that impacted altruism in earlier times, it was also reaction to war.

In earlier times, conflict between different groups was a very common phenomenon. What that did was that whenever there was conflict, groups became much stronger and altruism flowered. This research was repeated in places like Haiti just a few years back and what they found was that whoever has been subjected to conflict becomes far more altruistic. So while reciprocal altruism is restricted to a smaller set of people, this was a much bigger trigger.

The possible implication of that is that if we are becoming more and more peaceful, then altruism could be coming down. This seems to hold true in the case of religion, where in peace times, the need for religion seems to come down. Countries where the happiness quotient is high, religion takes a beating. So will altruism go down as well?

Udani: I don’t know about the peace aspect but certainly as there is abundance, it means we are reaching a state of equitable opportunity. And if we are, then need for altruism should come down and that isn’t a bad thing. For example, in a Scandinavian country where income levels are high and inequalities are low, giving is not a very big deal because you don’t see strife around that makes you give directly.

So the point that people give more in times of war and suffering, I think that is very valid. But I would put that in a context: people who are poor give a larger percentage of their income than people who are rich. The logic behind that finding is that poor people see more people in need around them. When you see that in close proximity, you have to be very cold-hearted to not do something about that. Your natural reaction is to help and thus you give far more of yourself.

Dominic: That’s an interesting point because that would mean that one of the things we need to do is to make people aware when there is abundance. The context they are in, may prevent them from seeing these problems and maybe people just need to be aware of what is happening around them.

Udani: One of the other changes we are seeing is that a lot of the high net worth donors want to get their children involved in philanthropy as well. That is mostly to do with imparting a certain value system.

Most of these donors have grown up in a middle-class background and achieved success through hard work, which has now taken them into a different strata. They are afraid that their children may not have the same value systems that they themselves grew up with. So they want to engage their children in these causes. So even for organizations, it’s important to try and engage children, engage families and bring them together in their philanthropy.