Altruism: What's in It for You?
Economists are stumped by the charitable urge, which they call irrational. So? Be irrational! Just don't be dumb
(MONEY Magazine) – You may remember the old Monty Python skit in which John Cleese, as a coldhearted banker, attempts to figure out the angle when a hapless charity worker asks him to donate a pound to an orphans fund. "I don't want to seem stupid," the banker says, "but it looks to me as though I'm a pound down on the whole deal."
So why do we give good money to people we don't know and who aren't going to give us anything in return? Economists haven't come up with anything better than the explanation given hundreds of years ago by that self-serving savant Adam Smith, who observed something in man's nature that "interest[s] him in the fortunes of others, and render[s] their happiness necessary to him, though he derive[s] nothing from it except the pleasure of seeing it."
In other words: That warm glow you get from making someone else's tough life a little easier? Priceless.
The typical American donates $1,600 a year to charity. We don't want to see ourselves as easy marks, however, which is one reason we like getting tchotchkes from charities in return (and claim a convenient tax write-off from Uncle Sam). But a new study by Stanford business school professor Dale Miller finds that charities' less-than-premium premiums mostly provide folks with an excuse to give, not a reason. That glow is worth more than the PBS tote bag.
While we need not be ashamed of our generous impulses, many charity pros say we could be wiser in how we donate.
•Look beyond the headlines. We give to groups that have more money than they can spend, while less telegenic charities starve (see the box below). Governments have pledged $5 billion to tsunami relief; Columbia University economist Jeffrey Sachs contends that even half that amount could help doctors gain control over malaria epidemics that kill more than 2 million people annually.
•Don't just give to whoever asks first. When you donate $30 to someone who managed to get you on the phone during dinner, you're perpetuating one of the least effective forms of fund raising around. Telemarketers often eat more than 50¢ for each dollar they raise.
•Send cash, not clothes and supplies. Too many of us forget that the cost of transporting even urgently needed goods may be more than they're worth.
•Save symbolic gestures for yourself. A day of fasting may give you more empathy for the world's hungry. But it won't do them much good unless you're also inspired to grab your checkbook or volunteer in a local soup kitchen on some day other than Thanksgiving.
•Grow your glow. Research suggests it's harder to get people to help those they see as different. The tsunami broke down this wall, inspiring Americans to help people literally at the other end of the earth. Charity begins at home, but it doesn't have to end there. —DAVID FUTRELLE
Fine-Tuning Your Generosity
Some well-known charities have more tsunami donations than they can manage. The three on the top line have general relief funds for help where it's most needed worldwide. The next three are sound choices too. Better yet, give to more than one.