When charity begins at home: How personal financial scarcity drives preference for donating locally at the expense of global concerns

Michal Herzenstein and Steven S. Posavac

Journal of Economic Psychology, 2019, vol. 73, issue C, 123-135

Abstract: Research was conducted to understand what drives individuals’ decisions to make charitable donations to local charities versus international charities that serve targets in far-away places. Six experiments using real charities were conducted: in two experiments participants donated their own money and in the other four participants dictated the allocation of money donated by the authors. Results demonstrate that when individuals perceive that their personal financial resources are scarce, their charitable allocations are weighted more heavily towards local charities. A random effects meta-analysis of effect sizes corroborates the robustness of these results. The authors discuss research on social myopia, altruism, and evolutionary psychology to explain charitable priorities, and demonstrate that financial scarcity is an activating agent that drives individuals to prioritize local charities regardless of the importance of the charity and neediness of the beneficiary. The authors further show that the individual’s implicit similarity to the target of donation further enhances the effect of personal financial scarcity. The authors present the results within the context of the broader conversation among psychologists and philosophers regarding optimal giving to achieve the greatest social good, suggesting that even a small change in donation allocation has substantial economic consequences for charities far away from home.

Keywords: Charitable behavior; Personal financial scarcity (search for similar items in EconPapers)
JEL-codes: D64 N30 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:73:y:2019:i:c:p:123-135

DOI: 10.1016/j.joep.2019.06.002

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