Deborah Small on Charitable Giving

Is giving to a charitable cause essentially equivalent to any other economic decision made by a human being, bounded by the same rational and irrational inputs as any other expenditure? Based on research by psychologist Deborah Small and others working in the area of philanthropy and altruism, the answer is a resounding no.

In this Social Science Bites podcast, Small, the Adrian C. Israel Professor of Marketing at Yale University, details some of the thought processes and outcomes that research provides about charitable giving. For example, she tells interviewer David Edmonds, that putting a face to the need – such as a specific hungry child or struggling parent – tends to be more successful at producing giving than does a statistic revealing that tens of thousands of children or mothers are similarly suffering.

This “identifiable victim effect,” as the phenomenon is dubbed, means that benefits of charity may be inequitably distributed and thus do less to provide succor than intended. “[T]he kind of paradox here,” Small explains, “is that we end up in many cases concentrating resources on one person or on certain causes that happened to be well represented by a single identifiable victim, when we could ultimately do a lot more good, or save a lot more lives, help a lot more people, if – psychologically -- we were more motivated to care for ‘statistical’ victims.”

That particular effect is one of several Small discusses in the conversation. Another is the “drop in the bucket effect,” in which the magnitude of a problem makes individuals throw up their arms and not contribute rather than do even a small part toward remedying it.

Another phenomenon is the “braggarts dilemma,” in which giving is perceived as a good thing, but the person who notes their giving is seen as less admirable than the person whose gift is made without fanfare. And yet, the fact that someone goes public about their good deed can influence others to join in.

“[O]ne of the big lessons in marketing,” Small details, “is that word of mouth is really powerful. So, it's much more effective if I tell you about a product that I really like than if the company tells you about the product, right? You trust me; I'm like you. And that's a very effective form of persuasion, and it works for charities, too.”

Small joined the Yale School of Management in 2022, moving from the University of Pennsylvania’s Wharton School, where she had been the Laura and John J. Pomerantz Professor of Marketing since 2015. In 2018, she was a fellow of the American Psychological Society and a Marketing Science Institute Scholar.