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Nudging Our More Charitable Selves

By Mark Cotteleer, Research Director and leader of the Center for Integrated Research at Deloitte Services LP

Mark Cotteleer

Good intentions gone to waste

Too often, when considering options like giving blood, making a charitable donation, or becoming an organ donor, the only thing we end up giving is the passing thought, “Maybe next time.” Our good intentions get lost in the fast-paced shuffle of the day. And before we realize it, the thought has passed and we move on to the next task. Why is it that so often, we want to “do good by others” but end up failing to take the necessary action to do so?

The field of behavioral economics offers some answers. Through the combination of economics and psychology, behavioral economics explores the cognitive biases that influence how we assess and make decisions—especially when those decisions run counter to our best intentions.

For charitable giving, one behavioral bias that can often manifest itself is the planning fallacy. This happens when we make assumptions about what we can accomplish without considering the myriad complications that might inhibit or delay our efforts. If you were late for a meeting recently, chances are you fell victim to the planning fallacy.

Unlike other areas, helping people sidestep these cognitive pitfalls can be difficult. For starters, freely giving our time or money to a cause is said to be intrinsically motivated: actions that satisfy internal goals—like learning to play an instrument or volunteering at a shelter—that are not motivated by money or some other external reward. Instead, overcoming biases like the planning fallacy requires us to create an environment that speaks to intrinsic motivations.

Make it simple, make it social

Thankfully, evidence now shows that when programs are designed to take into account how people think, success often follows. Even more promising, this “design thinking” frequently does not require giant overhauls but rather small “nudges” that can result in substantively positive outcomes.

A key tenet in design thinking is to make a nudge simple. Integrating a smart default has a proven track record in nudging positive behavior. Consider the much-heralded Save More Tomorrow program for retirement savings. Here, employees enroll in a program that auto-escalates annual retirement contributions after each raise. This simple option yielded impressive results: A full 78 percent of participants joined and average savings jumped from 3.5 percent to 13.6 percent over 40 months.

Organizations such as SmartGiving are taking these findings and using them to bolster charitable causes. Through employer partnerships, SmartGiving enables employees to choose a donation amount that automatically gets deducted from their regular paychecks. Now employees can choose to donate without having to actively consider each opportunity.

If defaults help us overcome planning fallacies, social proof can speak to our intrinsic motivations. When we see others doing good, it motivates us to follow suit. Social proof has even kindled more honest behavior among government beneficiaries.

The Ice Bucket Challenge may be the most widely acclaimed example of effective deployment of social proof. Engaging others to “join in” and participate in helping to fight against ALS resulted in a worldwide phenomenon. An incremental $220 million was raised to help this cause by simply invoking social proof.

If designed correctly, these nudges provide people with a wonderful opportunity: They help our “fast-paced” selves come to decisions that our “slow-paced” selves would prefer—no matter how quickly life moves.

Re-published here as part of CSRlive.in’s collaboration with Your Mark On The World Center


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