Giving with affluence
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How altruistic and social pressure motivation drive giving by the wealthy in the United States and the Netherlands - ISTR Conference, Stockholm, Sweden.
Arjen de WitFolgen
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Giving with affluence
- 1. GIVING WITH AFFLUENCE: HOW ALTRUISTIC AND SOCIAL PRESSURE MOTIVATION DRIVE GIVING BY THE WEALTHY IN THE UNITED STATES AND THE NETHERLANDS PAMALA WIEPKING, ERASMUS UNIVERSITY ROTTERDAM (PWIEPKING@RSM.NL) ARJEN DE WIT, VU UNIVERSITY AMSTERDAM (A.DE.WIT@VU.NL) XIAONAN KOU, LILLY FAMILY SCHOOL OF PHILANTHROPY, IUPUI (KOUX@IUPUI.EDU) JUNE 30, 2016 ISTR CONFERENCE STOCKHOLM DEPARTMENT OF BUSINESS-SOCIETY MANAGEMENT
- 2. RESEARCH QUESTION • What motivates some HNW individuals to donate more money to philanthropic organizations than others? • Two types of explanations: – Individual-level differences in motivations and socio-demographic characteristics of HNW individuals – Contextual-level differences in the social environment in which HNW individuals live
- 3. INDIVIDUAL LEVEL EXPLANATIONS Extrinsic motivation Intrinsic motivation Motivations Socio-demographic characteristics
- 4. CONTEXTUAL LEVEL EXPLANATIONS A culture of philanthropy (Wiepking & Handy, 2015) Philanthropy and nonprofit sector are (perceived as) instrumental in providing public goods and services Philanthropy is discussed openly 4 + Compositional explanations
- 5. DATA 2010 Bank of America Study of High Net Worth Philanthropy Giving in the Netherlands Panel Survey 2010 HNW Supplement 5
- 6. DATA Some descriptives 6 BOA GINPS Female 20.2 % (40.2) 27.57 % (44.71) Age 66.2 (12.6) 64.7 (11.5) Yearly hh income /1000 $ 593.21 (946.04) $ 280.07 (371.54) Wealth /1000 $ 11,487.24 (63,933.96) $ 1,858.13 (5,476.73) Donated 98.20 % (13.32) 93.26 % (25.08) Amount donated $ 45,327.01 (208,320.47) $ 2,944.88 (11,171.52)
- 7. REGRESSION RESULTS Ln(Amount donated) 7 BOA GINPS HH yearly income /1000 0.001*** (0.000) 0.286* (0.170) HH wealth /1000 0.000 (0.000) 0.009 (0.012) Financial security 0.346 (0.458) 1.215*** (0.313) (Constant) 3.105* (1.143) 1.443** (0.565) N 643 778 R2 0.174 0.261 Controlled for altruistic motives, being asked, social pressure, source of wealth, religious attendance, education, gender, being married, having children, age.
- 8. REGRESSION RESULTS (CONT’D) Ln(Amount donated) 8 BOA GINPS Altruistic motives 1.833*** (0.621) 2.113*** (0.461) Being asked 0.756* (0.439) 0.567 (0.413) Social pressure 0.866*** (0.238) 1.675*** (0.402) (Constant) 3.105* (1.143) 1.443** (0.565) N 643 778 R2 0.174 0.261 Controlled for income, wealth, source of wealth, feeling of financial security, religious attendance, education, gender, being married, having children, age.
- 9. CONCLUSIONS • The feeling of financial security is more strongly related to giving among HNW households in the Netherlands than it is in the US • Altruistic motives and especially social pressure appear to be more important explanations in the Netherlands, while being asked appears to be a more important explanation in the US • Overall, HNW giving appears to be strongly driven by altruistic motives
- 10. NEXT STEPS • Impute values on missings • Run analyses on pooled dataset • Interpretation of contextual differences
- 11. THANK YOU
- 12. DATA 12 Altruistic motives BOA GINPS Do you usually give… - When you believe that your gift can make a difference - Spontaneously in response to a need - In order to give back to your community - I prefer to work for my own welfare rather than for that of others - I strive to work for the welfare of society - I do not feel much like helping others - I consider it important to share my possessions with others - I do not like spending time doing things for others - I consider it important to try to help others - I do not like engage in charity - I consider it important to help the poor and the needy
- 13. DATA 13 Being asked BOA GINPS Do you usually give… - When you are asked Are you asked to give last two weeks via... Door-to-door collection / Street collection / Sponsor campaign / Collection in the church / Collection via membership organization / Television campaign or telethon / A direct mail letter / internet/email / Collection during an event / Buying lottery tickets / family / friends / charity event
- 14. DATA 14 Social pressure BOA GINPS Did you make some donations because it was expected of you? - My friends would find it weird if I would tell that I give a lot to charitable causes - My colleagues appreciate it when I give a lot to charitable causes - My family would find it weird if I would not give money to charitable causes - Many people I know appreciate it when I give more to charitable causes
Hinweis der Redaktion
- Warren Buffet: will donate 99% of his wealth (estimated at 60 billion US dollar, most of it to Bill & Melinda Gates Foundation) Frits Goldschmeding, founder Randstad recruitment/temp agency: not clear how much he gave, but “substantial ammount that can be used in the length of days” Van Vliet, Adessium Foundation, most generous donor in the Netherlands in 2015: 16,4 million euros (10% of their estimated wealth; ranked 109 in list wealthiest Dutch people).
- Intrinsic motivation: Altruistic motivation is defined as a motivational state with the ultimate goal of increasing another’s welfare (Batson, 2010). The empathy-altruism hypothesis states that when people feel empathic concern for a person in need, they will produce altruistic motivation to relieve that need (Batson, 2011; Batson, 2010). Empathic concern is defined by Batson as the “other-oriented emotional response solicited by and congruent with the perceived welfare of someone in need” (Batson, 2010: 20). When people act upon their altruistic motivation and make a charitable donation they confirm their self-image of being a moral and prosocial person. Not acting upon their altruistic motivation when presented with the opportunity can lead to inconsistency with this self-image of a moral person and consequently to feelings of guilt or regret (Andreoni, Rao, & Trachtman, 2011; Bekkers & Wiepking, 2007). Bekkers and Wiepking (2011) refer to this as the psychological benefits of giving. Recent neuroscience studies confirm this. Value mechanism (Bekkers & Wiepking) Extrinsic motivation: social pressure motivation. Power of the ask (Yoruk, 2009; Bryant et al, 2003). Stronger if asked by someone closer to you (Bekkers, 2004) Anticipated social consequences: reputation effects (B&W) or “image motivation” (Ariely et al., 2009), Socio-demographic characteristics: Income, wealth, source of wealth, perception of financial security, religious affiliation and attendance, education, gender and family status. - HNW individuals who have higher income (H4a), hold higher levels of wealth (H4b), are self-made (H4c) and feel more financially secure (H4d) will donate higher amounts of money to philanthropic organizations. - HNW individuals who are religiously affiliated (H5a) and attend religious services more frequently (H5b) will donate higher amounts of money to philanthropic organizations. - HNW individuals who are higher educated will donate higher amounts of money to philanthropic organizations (H6). - We expect that among HNW individuals men will donate higher amounts of money to philanthropic organizations than women (H7). - We expect that HNW individuals who are married (H8a) and who have children (H8b) will donate higher amounts of money to philanthropic organizations.
- Second, we argue that contextual-level differences also influence HNW giving behavior. Although similar individual motivations for generosity among HNW individuals exist across different Western cultures, their prevalence might vary depending on the cultural context in which HNW individuals live. We expect that HNW individuals have both lower intrinsic and extrinsic motivations for giving in a country where there is a strong culture of philanthropy, where the government has a relatively large role in providing public goods and services, in contrast to a country where a relatively large share of public goods and services is provided by the private, philanthropic sector. 1. Public goods are not a sole state responsibility. Philanthropy and the nonprofit sector are commonly perceived as more relevant and important, examples: United States, Russia and South-Korea. In contrast, in welfare states people perceive philanthropy and the nonprofit sector to be supplementary to the state. They feel that the government is responsible for providing key public goods and services, and not the nonprofit sector. This typically inhibits people’s willingness to make philanthropic contributions. Examples: United States, South-Korea. Russia: “Society and the state realized more clearly that private philanthropy and NPO development form essential precondition of successful solving the current social problems” Contrast: Welfare states, e.g., Netherlands: “People in the Netherlands typically donate to nonprofit organizations active in fields that are not considered core state responsibilities, such as education, public health, and public and social benefits.” 2. Another aspect of a ‘culture of philanthropy’ is whether philanthropic giving is something that is very visible and discussed openly, or whether people typically do not discuss their philanthropic behavior. Visibility of insturmental major donors, giving pledge (Buffet 99% fortune to Bill Melinda Gates in 2010). Example France: “While many donors remain anonymous, a growing number of philanthropists have started to talk openly about their giving.” Contrast Switzerland: people do not discuss giving (religious motivations), South-Korea: Lack of major donors and thus no examples.