Simple tweak could nearly double the amount you give to charity

Science Magazine: 

A representative from a charitable organization stops you on the sidewalk and asks for $100 to feed people starving in the developing world. And a large donor has agreed to match your donation. Still, you hesitate, because you wonder how much of that money will be sucked up by the salary of the charity’s CEO or the costs of yet more fundraising. “Don’t worry,” the rep tells you, “all of those overhead costs are paid for by another donor: So 100% of your money will help the hungry.” It may seem to be nothing more than an accounting trick—after all, the charity’s budget and operation hasn’t changed—but you will now be almost twice as likely to donate and willing to give 75% more money, according to a new study. It is yet more evidence that classic economic theory is wrong about how people make decisions.

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“This is a very clever study with obvious real-world implications,” says Daniel Oppenheimer, a psychologist at UC Los Angeles. Overhead aversion has long been known to be powerful, he says, even causing “people to prefer to give to charities with lower overhead that help fewer people than charities with higher overhead that actually do more good.” But a practical challenge will be to find donors willing to cover the overhead, because “large donors don’t like overhead any more than other donors.”

Read the whole story: Science Magazine