George Bernard Shaw quipped that a rich man ‘does not really care whether his money does good or not, provided he finds his conscience eased and his social status improved by giving it away’. Was he right?
In Socialism for Millionaires (1896), the Irish playwright George Bernard Shaw quipped that a rich man ‘does not really care whether his money does good or not, provided he finds his conscience eased and his social status improved by giving it away’. Was he right to be so cynical?
The reality today is that private wealth finances only a tiny fraction of social needs. According to Arton Capital and Wealth-X’s philanthropy report (2015), ultra-high net-worth individuals in the United States (those who have $30 million and above in net assets) gave $49.2 billion to charities in 2015 – or 19 per cent of all individual philanthropic donations in the US. But if we bring in data from the Urban Institute, which puts the total revenue for US charities at $1.73 trillion in 2015, the super-rich contribute less than 3 per cent of the total.
At least we can console ourselves that non-profits will probably trundle on without donations from the very wealthy. But can the wealthy ‘survive’ without giving? What needs are fulfilled by philanthropy? Do we give to make the world a better place, to give back to the community? Or is charity motivated by reasons that are far less noble – peer pressure, social status, a version of conspicuous consumption?
Studies show that, in general, people who feel good, do good – and likewise, people who do good, feel better. The rich are no exception. Giving to charity activates parts of the brain related to reward and pleasure. Yes, the rich do have some distinctive reasons for giving to charity, such as the desire not to ‘morally corrupt’ their heirs. But like others, they also give to strengthen their identity – and probably, to relieve their guilt. As Shaw said, with typical epigrammatic acuity: ‘One buys moral credit by signing a cheque, which is easier than turning a prayer wheel.’
The first person to attribute the act of charity to improving one’s public image was the 18th-century Scottish economist Adam Smith, who claimed that people make moral and ethical decisions based on how an impartial observer would judge them. This idea harks back to a dialogue about justice in Plato’s Republic, in which Glaucon tells Socrates that people behave ethically only when they think others are watching.
Fast-forward to 2009, when Dan Ariely, a behavioural economist at Duke University in North Carolina, co-conducted a study evaluating the motive of outward appearances in giving to charity. The research found that appearances are so important that they even trump financial incentives. In the experiment, participants were divided into two groups, where each group was asked to type a combination of letters on a keyboard. They were told that if they typed the combination correctly, some money would be donated in their name to the Red Cross, although never more than a few dollars.
In the ‘private’ group, members were exposed only to their own ‘giving’ scores, whereas in the ‘public’ group, each member was asked to publicly announce his or her donation to the others. In the end, members of the public group got the letter combination right twice as often as members of the private group. At a later stage of the experiment, researchers decided to test whether people would forgo a financial reward to look altruistic in the eyes of others. In the public group, adding a personal financial incentive had only a small effect on its success rate, whereas it increased the private group’s success rate by 35 per cent.
There’s no doubt that outward appearances help to explain the rise of modern philanthropy. In the early 20th-century US, giving was a way of gaining status for those who had recently acquired a fortune. ‘New’ and ‘old’ money competed for large-scale public projects, such as the American Museum of Natural History in New York and the New York City Opera. One can find the names of individual donors splashed across the programmes of philharmonic orchestras, in university brochures and on hospital walls. If donors were not concerned with their personal brand, these displays would be meaningless. In several documented cases at US universities, only around 1 per cent of donors requested to remain anonymous – a statistic often cited by those who argue that cachet and publicity are the main reasons that the rich give to such institutions. And when donations are publicly listed by category, most people donate equal to or slightly above the minimum amount required to secure their spot.
Some researchers explain donors’ behaviour with an economic rationale: donors reap benefits from their contributions. When a person donates to a university, perhaps they expect their child to study there. When they donate to a hospital, they’re thinking about the day they need its services. However, in 1990 the economist James Andreoni at the University of California, San Diego showed that this model, like that of pure altruism, doesn’t capture all the reasons why people give. Perhaps donors enjoy a ‘warm glow’ from giving, he suggested. Art benefactors, for example, want to perceive themselves as art lovers, as much as they want to contribute to art.
Sometimes people donate when they’d rather not – simply because it’s hard to refuse. Researchers at the University of California, Berkeley conducted an experiment in which they asked for donations door-to-door. Some of the houses got a flyer that announced an arrival time for collections, and the others got flyers without a fixed time. In the end, the sum collected from those notified was 17 per cent lower than from the others. The experiment was repeated, except this time the advance-notice flyer was accompanied by an optional ‘do not disturb’ tick box. The money raised from the group who ticked the box was 35 per cent less than that raised from the group who received no notice.
True, the majority of donations made by the very wealthy are not handed to anonymous fundraisers who knock on doors. Rather, many are made to colleagues and friends who are hard to refuse, especially when they ask for donations to the charities that they champion.
Let’s remember, too, that the problems philanthropists want to solve are frequently the result of government decisions, resource allocation and the status of human and property rights. If philanthropists were to commit to deeper and more meaningful action – if they joined governments or other institutions – they could affect public welfare in a more enduring way. Instead philanthropists are often slow to get involved in public policy, and prefer to make donations that counteract the government’s shortcomings. This reveals where their priorities really lie.
It’s probably impossible to find one explanation for all these patterns. They operate in an intricate web of motives and interests, both altruistic and egoistic. The extent of egoistic motives varies across donors (due to individual diversity), but is linked to donation amount (size matters). Paul Schervish, a professor of sociology at Boston College, claims that an amalgamation of circumstances and on-the-go decisions compel the rich to give, rather than a defined set of psychological reasons. He came up with the term ‘moral biography’ to describe an individual’s personal capacity and moral compass.
Perhaps the most original answer to the question of ‘why they give’ was offered by the psychologist Ernest Becker. In his Pulitzer-Prize-winning book The Denial of Death (1973), Becker explains that humans use culture to fight against our awareness of our own mortality. We try to give our life a meaning that will outlast us after death. That, or else we distract ourselves from the existential ‘terror’ by engaging in mind-numbing entertainments – which today might include reality television or social media.
Religious faith is one way we typically tackle the threat of mortality, but it’s certainly not the only thing in humanity’s toolbox. Hoarding (including money and assets), artistic creativity and even establishing a big family are all things that we hope will outlast us. So whether we leave a plaque with our name on a building, or tell ourselves that we promoted social change and helped the disadvantaged, are we all just trying to fulfil the human quest for meaning, a quest that might be nothing more than the defiance of death?
This article was originally published at Aeon and has been republished under Creative Commons.
Two billionaires are apparently funding research into how we can escape the simulation they believe we’re trapped in.
Do you think we're actually living in a gigantic computer simulation like the one in The Matrix? If you do, you're not alone. In fact, you're in some very famous, very wealthy company. Near the end of a recent New Yorker article about Y Combinator, a Silicon Valley tech-company incubator, this paragraph raised the possibility we're in need of a red pill:
Many people in Silicon Valley have become obsessed with the simulation hypothesis, the argument that what we experience as reality is in fact fabricated in a computer; two tech billionaires have gone so far as to secretly engage scientists to work on breaking us out of the simulation.
The billionaires weren't named, but we can guess. Earlier in the piece, its writer, Tad Friend, pointed out something odd to one of his interviewees, Y Combinator president Sam Altman. Friend noted that Altman apparently hadn't visited a bathroom over the course of several days' interviews. Altman responded, “I will practice going to the bathroom more often so you humans don't realize that I'm the A.I." It could be he wasn't 100% joking.
Another breakout candidate is Elon Musk, who claimed in an interview at Recode's Code Conference 2016 that the odds of us not being in a simulation are “one in billions." His reasoning is that with all the advancements we've seen already, how could it not happen?
Musk suggests this has been a conversation in a lot of the hot tubs he soaks in with his (presumably also-wealthy) friends, some of whom are deeply involved in virtual-reality projects. Certainly, current systems like Oculus couldn't fool anyone, but these people spend their days immersed in VR and new tech, dreaming and designing future capabilities, so they would naturally be drawn to the question. Wait a minute. Wasn't humanity actually trapped and wired into (let's say hot) tubs in The Matrix?
At least one major company whose business depends on a clear-eyed assessment of imminent possibilities also agrees this could be where we really are. Financial behemoth Bank of America considers the odds of us living in a simulation to be as high as 50%. Yipes.
Big Think recently asked Bill Nye what he thought of the entire notion, and he asked the really simple unanswerable question: How could we ever know, absent a really inarguable glitch? [Insert Trump joke here.]
A skeptic could ask why ubiquitous overlords would even allow this topic to come up in our simulated discussions — or allow the release of a movie like The Matrix — if they didn't want us to know. (Maybe the two Matrix sequels were supposed to ruin the original.) Could letting the topic come up in conversation or science fiction be a way to de-pressurize and de-fang doubts our programmers consider inevitable? Maybe articles like this, in which the writer doesn't believe it's a simulation, are part of that steam-letting mechanism.
In a way, maybe choosing to believe we're in a simulation fills an unconscious need for a post-religion, science-based God. And it's not like escaping a matrix would answer all of our Big Questions: We still would want to know if there's a reason we exist and what happens when we die.