Future of Charitable Giving

Posted in Projects

Optimizing Philanthropic Behavior

Americans donated over $390 billion to charities in 2016. What’s interesting is that the bulk of this money didn’t come from what are often thought of as the usual suspects in giving—large checks from major foundations or wealthy corporations. Rather, 72% of philanthropic dollars came directly from individuals. Contrary to the conception of individual donors as affluent philanthropists, the vast majority of donors are everyday Americans supporting a diverse universe of charitable organizations across the globe.

With more than a million public charities headquartered in the U.S. alone, how do individual donors decide where to give? It isn’t surprising that they may find it complicated to choose thoughtfully, given the sheer number of options. One large survey revealed that while 85% of donors say they care about nonprofit performance, less than 10% actually give based on the relative performance of nonprofits.

The enormous mismatch between donors’ intentions and behaviors suggests that there are features of the giving context that inhibit donors from being purposeful and strategic with their dollars. That’s why with generous support from the Bill & Melinda Gates Foundation, we have partnered with leaders in philanthropy to develop and test behavioral solutions aimed at improving the giving process.

We published results and insights from our efforts thus far in a report: Best of Intentions: Using Behavioral Design to Unlock Charitable Giving. In the report we identify many of the specific behavioral barriers and biases preventing thoughtful charitable giving behavior, and share results from the solutions we tested to help people take a generous, intentional, and informed approach to giving.

We will continue our work in charitable giving by building on these initial findings and engaging in new partnerships to design and test innovative solutions. By developing generalizable insights through experimentation, our work will equip the philanthropic sector with evidence-based approaches to better giving. These solutions have the potential to help donors better direct their dollars at the organizations they care most about, ultimately benefiting nonprofits and people around the world.

Interested in learning more about applying behavioral science to giving? Reach out to us at info@ideas42.org.