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Warm glow and charitable giving: Why the wealthy do not give more to charity?

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  • Mayo, John W.
  • Tinsley, Catherine H.

Abstract

Attempts to understand the economic and psychological motivations for charitable giving date at least back to Adam Smith (1759). In his Theory of Moral Sentiments, Smith attempts to explain why and how an individual or household will feel sympathy for other less well-off individuals or households. At the heart of Smith's analysis is the general proposition that sympathy (and presumably discernible actions based on that sympathy) is embodied in the ability of an individual to imagine, from his own perspective, the plight of the less well-off household. In this paper we posit a model of charitable giving that is predicated on this basic proposition that we believe lies at the center of explaining the pattern of charitable giving in the United States. In particular, we suggest that understanding the fundamental human and economic drivers of giving requires us to consider the nature and determinants of the "warm glow" a household experiences when making charitable donations to other households. We borrow from cognitive psychologists' research into how people judge reward distributions and infer causality of such distributions to explain when households are more and less likely to experience this warm glow. Specifically, we explain how biased perceptions of effort and luck, as the causes of reward distributions, will systematically reduce warm glow of high-income households, which may help explain the essentially flat relationship between income and percentage donations to charity.

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  • Mayo, John W. & Tinsley, Catherine H., 2009. "Warm glow and charitable giving: Why the wealthy do not give more to charity?," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 490-499, June.
  • Handle: RePEc:eee:joepsy:v:30:y:2009:i:3:p:490-499
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    2. Ambrose Leung & Cheryl Kier & Tak Fung & Linda Fung & Robert Sproule, 2011. "Searching for Happiness: The Importance of Social Capital," Journal of Happiness Studies, Springer, vol. 12(3), pages 443-462, June.
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    5. Interis, Matthew G. & Haab, Timothy C., 2014. "Overheating Willingness to Pay: Who Gets Warm Glow and What It Means for Valuation," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(2), pages 266-278, August.
    6. Sutan, Angela & Grolleau, Gilles & Mateu, Guillermo & Vranceanu, Radu, 2018. "“Facta non verba”: An experiment on pledging and giving," Journal of Economic Psychology, Elsevier, vol. 65(C), pages 1-15.
    7. Sera Linardi & Nita Rudra, 2015. "Globalization and Redistribution Towards the Poor in Developing Countries: Experimental Evidence from India," Artefactual Field Experiments 00399, The Field Experiments Website.
    8. Lorna Zischka & Marina Della Giusta, 2016. "Helping without Trusting: Disentangling Prosocial Behaviours," Economics Discussion Papers em-dp2016-11, Department of Economics, University of Reading.
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    10. Jintong Tang & Zhi Tang & Shaji A. Khan, 2022. "Do the rich give more? The effects of family wealth and entrepreneurial effort on firm philanthropy and growth," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 699-722, June.
    11. Andrés Rodríguez-Pose & Viola Berlepsch, 2014. "Social Capital and Individual Happiness in Europe," Journal of Happiness Studies, Springer, vol. 15(2), pages 357-386, April.
    12. Sutan, Angela & Grolleau, Gilles & Mateu, Guillermo & Vranceanu, Radu, 2018. "“Facta non verba”: An experiment on pledging and giving," Journal of Economic Psychology, Elsevier, vol. 65(C), pages 1-15.
    13. De Vries, Eline L.E. & Duque, Lola C., 2018. "Small but Sincere: How Firm Size and Gratitude Determine the Effectiveness of Cause Marketing Campaigns," Journal of Retailing, Elsevier, vol. 94(4), pages 352-363.
    14. Thomas Husted & David Nickerson, 2021. "Private Support for Public Disaster Aid," JRFM, MDPI, vol. 14(6), pages 1-19, June.
    15. Duquette, Nicolas J. & Hargaden, Enda P., 2021. "Inequality and giving," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 189-200.
    16. Nicolas J. Duquette & Enda Hargaden, 2018. "Inequality, Social Distance, and Giving," Working Papers 2018-03, University of Tennessee, Department of Economics.
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