If You Need An Incentive to Donate, You Might Be Doing It Wrong

One consequence of the decline of the economy has been a significant drop in charitable donations across numerous areas, like the arts, education, and the environment. There’s less money to go around, people are clinging harder to their funds when they do have them, and charities are sometimes struggling to make do, making difficult decisions like laying off staff and cutting services so they can keep functioning even if at a limited capacity. These decisions are not made lightly, but they have to happen to keep organisations functional.

Historically, charities have always been reminded that they need to create an incentive to donate; in addition to the feel-good sensation of giving money, donors want to be given a stake of some kind. Maybe it’s an NPR tote bag, or a name on a plaque in the hallway, or an opportunity to comment in an official capacity on an organisation’s policies and activities. Donate enough money and you can have a significant impact on what a group does and how it conducts its business, because it operates in awareness of the fact that its funding is dependent on your generosity.

Humans are complex creatures, and the idea of human kindness and a naturally charitable disposition is sometimes bandied about, but the truth isn’t quite that simple. While humans may naturally feel cooperative in some settings, we’re also competitive, and we have a lot of social conditioning to consider as well, which is something that seems to be forgotten when people start talking about human behavior in group settings. We aren’t dropped into a void, imprinted with centuries of genetic heritage and nothing else.

Some of us are kind and some of us are not. Some of us with money are raised in a charitable culture and some are not. Many people who donate to charity want a reason to donate, even if they don’t express it out loud because that sort of thing would be considered uncouth. It’s not just about a transaction of offering funds to support an individual or organisation and feeling personally rewarded by the outcome. Feeling good about yourself for donating is an intrinsic reward, but it feels even better when people see you do it, and when you get something more tangible in exchange for doing it.

Which is why charities have these fancy balls and waste tons of money on events and incentive prizes and member outreach and all these other things that they do. Not because they enjoy wasting these funds, but because they have to attract and retain members who will keep donating, and they know that people need a reason to donate. And that this reason must extend beyond ‘here is what we do, please give us funding assistance so we can continue to do it, because it is a social good and a necessary thing.’

Because we don’t live in a happy and ideal world where that’s all people need to do the right thing; and charity, while a complex social issue, is a good thing. Turning back to the charity model and expecting charities to pick up the government’s slack is a problem, and using charity to force values and belief systems on people is a problem, and charities that exploit—like Goodwill and its underpaid workers—are a problem, but overall, supporting causes we believe in by putting something of ourselves into them is good, and gives us real stakes in our communities.

The government also participates in the creation of incentives for charitable donations by allowing people to claim them on their taxes. Naturally, this matters most for people with a lot of money, both because they can donate more money and because they have the largest tax liability, which thus puts them in a situation of actively looking for ways to reduce the size of the cheque they need to write for the IRS. (Which is, after all, precisely why the government is running out of funding to run the programmes it’s shunting off to charity; if it cracked down on tax evasion and stopped favouring the rich in tax policy, it would have ample funds available for basic services like health care and education.)

Wealthy people are astoundingly defensive about these tax deductions, insisting that they have a right to them with no caps or restrictions as an incentive to donate and a form of compensation for all the money they’re losing to charity. This approach is rather shocking and gross, because it suggests both that giving to charity is a net loss rather than a social gain, and because it exposes the naked greed behind many donations from the wealthy.

Obviously, if you donate $30,000 USD, you don’t immediately get a $30,000 discount on your taxes. Instead, the funds reduce your taxable income, meaning that your overall burden will be less than it would be otherwise. So there’s not a one to one correspondence here and clearly motives beyond saving on taxes are at work when wealthy people donate to charity. But they definitely play a role, and it’s distressing to see so many wealthy people warning that they’d reconsider their level of charitable engagement if the tax laws changed or these incentives were dropped altogether.

I’m sorry. Have we forgotten the point of charity? It’s not to evade responsibility for taxes or to push yourself into a lower tax bracket. The purpose is to support the overall social good by working with organisations you support. If you really wouldn’t do that if you didn’t get tax benefits for it, I have to question your allegedly philanthropic spirit. Sure, you’re still doing good, but the fact that it’s tainted with greed leaves a bad taste.