Delegating Altruism: Toward an Understanding of Agency in Charitable Giving

43 Pages Posted: 16 Sep 2016 Last revised: 2 Oct 2016

See all articles by Luigi Butera

Luigi Butera

Copenhagen Business School

Daniel Houser

Interdisciplinary Center for Economic Science

Date Written: August 5, 2016

Abstract

Philanthropy, and particularly ensuring that one’s giving is effective, can require substantial time and effort. One way to reduce these costs, and thus encourage greater giving, could be to encourage delegation of giving decisions to better-informed others. At the same time, because it involves a loss of agency, delegating these decisions may produce less warm-glow and thus reduce one’s charitable impulse. Unfortunately, the importance of agency in charitable decisions remains largely unexplored. In this paper, using a laboratory experiment with real donations, we shed light on this issue. Our main finding is that agency, while it does correlate with self-reported warm-glow, nevertheless seems to play a small role in encouraging giving. In particular, people do not reduce donations when giving decisions are made by algorithms that guarantee efficient recipients but limit donors’ control over giving allocations. Moreover, we find participating in giving groups − a weaker form of delegation − is also effective in that they are appealing to donors who would not otherwise make informed donations, and thus improves overall effective giving. Our results suggest that one path to promoting effective giving may be to create institutions that facilitate delegated generosity.

Keywords: Altruism, Laboratory Experiment, Agency, Charitable Giving

JEL Classification: C9, D64, D71

Suggested Citation

Butera, Luigi and Houser, Daniel, Delegating Altruism: Toward an Understanding of Agency in Charitable Giving (August 5, 2016). GMU Working Paper in Economics No. 16-38, Available at SSRN: https://ssrn.com/abstract=2839456 or http://dx.doi.org/10.2139/ssrn.2839456

Luigi Butera (Contact Author)

Copenhagen Business School ( email )

Denmark

Daniel Houser

Interdisciplinary Center for Economic Science ( email )

5th Floor, Vernon Smith Hall
George Mason University
Arlington, VA 22201
United States
7039934856 (Phone)

HOME PAGE: http://mason.gmu.edu/~dhouser/

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