Generosity is contagious, study finds

People give away money out of “innate honesty,” an experiment shows. Charities use that by being more transparent.

In the Netherlands, citizens and businesses give away four million euros to charities, churches or other faith-based organisations every year. And the amount donated has been rising for decades.

In an attempt to shed light on what makes people give away money, Amsterdam’s Vrije Universiteit (VU) has conducted an experiment. Jacintha Ellers, a professor of evolutionary ecology at the VU, announced the results of this study last week.

In the experiment, Ellers gave 600 anonymous test subjects 60 euros each and allowed them to choose whether they wanted to keep the money or give (part of it) away. The study showed one in four gave part of their money away to fellow participants.

There was no direct reason for doing so. “Some sort of innate honesty moved them to do it,” Ellers said. “People give because they have a deeply ingrained sense of justice.”

The test subjects tended to adjust their behaviour to the expectations they had of others. “Participants who thought others would give away some of their money gave away more themselves on average,” Ellers explained.

According to the professor, charities can take advantage of this effect, by publicly announcing the amount of money collected in fundraising activities. As it turns out, people are poor judges of other people’s generosity. “More than 40 percent underestimated the generosity of others, while only 30 percent overestimated it,” Ellers said.

Gender or age turned out to have no effect on generous behaviour. The variables at work in charitable giving must therefore be psychological in nature. Economic ones play a limited role. Even when times are tough, people continue to donate money.

“When the economy declines,” said Theo Schuyt, a professor of philanthropy at the VU. “Charity only follows suit to a very limited extent, and afterwards it is quick to bounce back again.”

Schuyt used social engagement to explain the absence of a substantial relationship between economic development and charity. “This goes for structural givers in particular, regular donors for instance. These people often give because they really believe in the goals of their charity. When the economy flounders their membership is not the first thing to go,” he said.

Even so, Dutch loyalty to charity has its limits, Schuyt explained. “Organisation can still improve a lot by allowing for increased transparency and openness, not just by touting their successes but also by admitting failures.”

According to Schuyt, charities often failed in the later respect. Perhaps an understandable tendency, he said, “but in the long term, restraint in communication can create an atmosphere of distrust with the public.”

Development aid organisations especially should be more open Schuyt said. “They often conduct their work in a chaotic environment. The occasional failed project is only to be expected and can easily be explained.” .

Even though he continued to argue for more transparency, Schuyt was quick to point out real progress had been made in this department in recent years. “Philanthropic organisations are more open in communicating what exactly they do with the money they collect. This is a good thing. Private individuals and businesses that give away their money have a right to an honest explanation.”