Overview
In a previous experiment, we investigated whether people’s willingness to donate to a nonprofit is affected by whether or not the nonprofit reports cost-effectiveness metrics (e.g., lives saved per dollar given). In this experiment, we go one step further and test whether a nonprofit that reports very high vs. very low effectiveness has any affect on potential donors' likeliness to give.
You’d think that people would try to give to the most effective charities. After all, you can literally save more lives without having to give away any additional money. But research shows we fall short in this area. Instead, we tend to give based on emotional preferences (Berman, et al., 2018). In our previous study, we even found that effective altruism metrics held little sway relative to simple statements like “updates provided annually.”
But perhaps donors have a hard time interpreting such metrics. What’s considered a “good” outcome in one area versus another? How do we know when a nonprofit is performing above or below average? Then again, perhaps donors really don’t care about cost effectiveness in their charitable giving.
To help cut through this ambiguity, we designed an experiment testing peoples’ likeliness to donate to nonprofits reporting obviously high or obviously low cost-effectiveness metrics.
You’d think that people would try to give to the most effective charities. After all, you can literally save more lives without having to give away any additional money. But research shows we fall short in this area. Instead, we tend to give based on emotional preferences (Berman, et al., 2018). In our previous study, we even found that effective altruism metrics held little sway relative to simple statements like “updates provided annually.”
But perhaps donors have a hard time interpreting such metrics. What’s considered a “good” outcome in one area versus another? How do we know when a nonprofit is performing above or below average? Then again, perhaps donors really don’t care about cost effectiveness in their charitable giving.
To help cut through this ambiguity, we designed an experiment testing peoples’ likeliness to donate to nonprofits reporting obviously high or obviously low cost-effectiveness metrics.
The Experiment
We conducted a within-subjects experiment with 205 people on the online research platform Prolific to test whether people are more likely to donate to a nonprofit that reports very high vs. very low effective altruism metrics. Participants were instructed to read a few brief descriptions of nonprofits, including one that reported a high cost-effectiveness metric and one that reported a low cost-effectiveness. Afterward, participants rated how likely they’d be to donate to each nonprofit.
We used two hypothetical nonprofits for this experiment, randomizing which nonprofit reported the high cost-effectiveness metric while the other reported the low cost-effectiveness metric. The two nonprofits included CleanWater, “An organization that provides purified water to victims of natural disasters,” and School Supply, “An organization that provides free school supplies to K-12 students.”
Below each of these descriptions was text stating either “(10 people helped per $1 donated in 2021)” for the high effective altruism condition, or “(1 person helped per $10 donated in 2021)” for the low effective altruism condition. These ratios of 1:$10 vs. 10:$1 equate to a hundredfold difference in cost-effectiveness. We randomized which condition and nonprofit each participant saw, as well as the order in which the two nonprofits were presented, for counterbalancing.
The following pair of descriptions illustrates one combination participants could have seen, as an example. Each description was preceded by the instruction, "Please read the nonprofit description below."
We used two hypothetical nonprofits for this experiment, randomizing which nonprofit reported the high cost-effectiveness metric while the other reported the low cost-effectiveness metric. The two nonprofits included CleanWater, “An organization that provides purified water to victims of natural disasters,” and School Supply, “An organization that provides free school supplies to K-12 students.”
Below each of these descriptions was text stating either “(10 people helped per $1 donated in 2021)” for the high effective altruism condition, or “(1 person helped per $10 donated in 2021)” for the low effective altruism condition. These ratios of 1:$10 vs. 10:$1 equate to a hundredfold difference in cost-effectiveness. We randomized which condition and nonprofit each participant saw, as well as the order in which the two nonprofits were presented, for counterbalancing.
The following pair of descriptions illustrates one combination participants could have seen, as an example. Each description was preceded by the instruction, "Please read the nonprofit description below."
CleanWater
An organization that provides purified water to victims of natural disasters.
(10 people helped per $1 donated in 2021)
An organization that provides purified water to victims of natural disasters.
(10 people helped per $1 donated in 2021)
School Supply
An organization that provides free school supplies to K-12 students.
(1 student helped per $10 donated in 2021)
An organization that provides free school supplies to K-12 students.
(1 student helped per $10 donated in 2021)
After reading each nonprofit description, participants were asked “How likely would you be to donate to this nonprofit? (1 = Very Unlikely, 7 = Very Likely)” on a 1-7 scale. This served as our outcome measure of interest, similar to prior studies (Lee, et al., 2014).
Results
As presented in the figure below, a paired samples t-test identified a small yet statistically significant difference in likeliness to donate when our nonprofits reported a high cost-effectiveness metric (avg. = 5.22) versus a low metric (avg. = 4.81), (p < 0.001). But this difference was small, only 8%, or a bit more than a quarter of a standard deviation (d = 0.275).
We also tested whether the results differed based on the nonprofit, CleanWater or School Supply. They did not. We found no significant interaction between nonprofit and high vs. low cost-effectiveness metric (p = 0.886). There was a small order effect, such that participants who saw the low cost-effectiveness metric first were less likely to donate to that less effective nonprofit (p = 0.011).
More details regarding our methodology and statistical analysis can be found here.
Conclusion
Research on the psychology of effective altruism has thus far painted a fairly pessimistic picture of donors’ willingness to use cost-effectiveness information in their charitable giving. This study does little to offset this picture. Although we do find that participants are more likely to donate when a nonprofit reports high cost-effectiveness versus low cost-effectiveness, this 8% increase is quite small given the hundredfold difference in lives helped per dollar given.
Now that we know how far this bias goes, perhaps future research can test how we can actually get people to give more effectively. In the meantime, you can at least equip yourself with the knowledge of which charities are faring best. According to GiveWell’s (2023) criteria of lives saved per dollar given, some of the highest impact causes and charities to donate to are as follows:
Topic: Malaria Prevention Medicine and Nets
Charities: Malaria Consortium, Against Malaria Foundation
Topic: Vitamin A Supplements for Children
Charities: Helen Keller International
Topic: Childhood Vaccine Incentives
Charities: New Incentives
Now that we know how far this bias goes, perhaps future research can test how we can actually get people to give more effectively. In the meantime, you can at least equip yourself with the knowledge of which charities are faring best. According to GiveWell’s (2023) criteria of lives saved per dollar given, some of the highest impact causes and charities to donate to are as follows:
Topic: Malaria Prevention Medicine and Nets
Charities: Malaria Consortium, Against Malaria Foundation
Topic: Vitamin A Supplements for Children
Charities: Helen Keller International
Topic: Childhood Vaccine Incentives
Charities: New Incentives
References
Berman, J. Z., Barasch, A., Levine, E. E., & Small, D. A. (2018). Impediments to Effective Altruism: The Role of Subjective Preferences in Charitable Giving. Psychological Science, 29(5), 834–844.
GiveWell. (2023, January 1). Our Top Charities. https://www.givewell.org/charities/top-charities
Lee, S., Winterich, K. P., Ross, W. T. (2014). I'm Moral, but I Won't Help You: The Distinct Roles of Empathy and Justice in Donations. Journal of Consumer Research. 41(3), 678–696.
GiveWell. (2023, January 1). Our Top Charities. https://www.givewell.org/charities/top-charities
Lee, S., Winterich, K. P., Ross, W. T. (2014). I'm Moral, but I Won't Help You: The Distinct Roles of Empathy and Justice in Donations. Journal of Consumer Research. 41(3), 678–696.