Unobserved Altruism: How Self-Signaling Motivations and Social Benefits Shape Willingness to Donate

Abstract

Public recognition is usually thought to motivate charitable giving. However, the current research identifies an important context in which the opposite occurs. We examine commonplace donation decisions involving modest amounts of money, which either take place in private, or are observed by others. We find robust evidence that public recognition can decrease donation likelihood. Further, we demonstrate that this effect operates through a self-signaling mechanism: public recognition creates ambiguity about whether the choice to donate is motivated by genuine altruism or the desire for recognition. As a result, public recognition can crowd-out, or undermine, the self-signal of altruism, which in turn decreases donation rates. Finally, we test an important theoretical boundary, and show that when the social benefits associated with public recognition for donating are sufficiently valuable, the negative effects of public recognition attenuate.

Keywords: charitable giving, donations, altruism, self-interest, crowding out, self-signaling, social signaling