Delegating Altruism: Toward an Understanding of Agency in Charitable Giving

Philanthropy, and particularly ensuring that one’ s giving is effective, can require substantial time and effort. One way to reduce these costs could be to encourage delegation of giving decisions to better-informed others. At the same time, because it involves a loss of agency, delegating these decisions may reduce one’s charitable impulse. Unfortunately, the importance of agency in charitable decisions remains largely unexplored. In this paper we shed light on this issue using a laboratory experiment with real donations in which we systematically vary the monetary and agency costs associated with making informed and effective giving decisions,. Our main finding is that agency seems to play a small role in promoting giving. In particular, people do not reduce donations when giving decisions are made by algorithms that guarantee efficient recipients but limit donors’ control over giving recipients. Moreover, we find that participating in giving groups - a weaker form of delegated giving -is also effective in that they are appealing to donors who would not otherwise make informed donations, and thus improves overall effective giving. Our results suggest that one path to promoting effective giving may be to create institutions that facilitate delegated generosity.