university of bristol schoolscharitychallenge
TRANSCRIPT
The University of Bristol’s Festival of Social
Sciences and Law presents:
SCHOOLS CHARITY
CHALLENGE 2013
8 November 2013
Tweet @UobFutures #TF2013
Introduction
Sarah Smith
(University of Bristol)
The challenge
• How to encourage (more) people to give to charity in the workplace
• Using insights from behavioural economics
• Drawing on experience of recent “giving trials”
What you will get from this
• Insights into
–behavioural economics
– applied economic research
• A “warm glow” from thinking about charity
Homo economicus
• Independent
• Rational
• Utility-maximising
Good 1
Good 2
U x1
x2
Other goods
Donation to charity
U x1
x2
How to get homo economicus to give more?
Other goods
Donation to charity
U x1
x2
Make it cheaper for people to give Offer a match Or a (tax) rebate
How to get homo economicus to give more?
Other goods
Donation to charity
U x1
x2
U’ x1’
x2’
Make it cheaper for people to give Offer a match Or a (tax) rebate
How to get homo economicus to give more?
Payroll giving schemes
• Allow people to give out of their gross (before tax) earnings – which means giving up less of the other things they want to buy
• Many firms offer a match on top of this
• But take up is low: <1% at the majority of firms with payroll giving schemes
Behavioural Economics Insights
• Does not do away altogether with homo economicus paradigm
• But makes different/ more realistic assumptions about the way people make decisions
Behavioural Economics Insights (1)
• Making rational decisions is a costly activity
• People may not always have – and/ or process – all the relevant information
• Small processing/ transactions costs have a big effect
Behavioural Economics Insights (1)
• Practical insights:
– The way options are presented matters
– Simplifying choices can have an effect on decisions
–Defaults (opt in/out)
Behavioural Economics Insights (2)
• People are social
– They care what other people think
– They are influenced by what other people do
Behavioural Economics Insights (2)
• Practical insights
– People respond to information on what other people have done
– Personal relationships matter
– Group dynamics are important
Charitable Giving Experiments
Michael Sanders
(University of Bristol
And Behavioural Insights Team)
Experiments – why?
• If we observe the world around us, we can learn a lot
• However, without a source of random variation, we can’t tell if one thing causes another.
• Random allocation – we expect two groups to be the same.
Charitable Giving Experiments
• Two experiments
• Carried out in two very different workplaces
• Very quick examples of what can be done
Experiment 1
• Inflation erodes the value of donations
• Charities Trust offers a solution – 3% annual increases, to keep the value of your giving
• Take-up quite low
Experiment 1
• Switch the default –
• Tick to opt in
• Tick to opt out
• Very simple intervention, which can be very powerful
Experiment 1: Results
6%
48%
0%
20%
40%
60%
Opt-in Opt-out
Enrollment into annual increases
Experiment 2
• Investment bank
• Asking people to give one day’s salary
• 63 Offices
Volunteers
Fliers
Sweets
Experiment 2: Results
5% 5%
11%
0%
20%
Control Group Fliers Sweets
Giving One Day’s Salary
The University of Bristol’s Festival of Social
Sciences and Law presents:
SCHOOLS CHARITY
CHALLENGE 2013
8 November 2013
Tweet @UobFutures #TF2013
The importance of giving in the workplace
Why choose payroll giving?
• Tax efficient
• Payroll giving is the most tax effective way for employees to support charities and good causes
• Social and community engagement
• Giving in the workplace delivers the feel good factor
• Flexible
• Complete choice over the charities they donate to and the amount
Engaging employees in workplace giving
• What works?
• Chocolate!
• Match funding
• The last 3 feet…
• What doesn’t work?
• Poor promotion/communication = lack of awareness
• A complicated/time consuming sign-up process
The University of Bristol’s Festival of Social
Sciences and Law presents:
SCHOOLS CHARITY
CHALLENGE 2013
8 November 2013
Tweet @UobFutures #TF2013
Now over to you
• Design an intervention to increase the level of giving in the workplace
• Prepare a brief (5 mins presentation)
• Your idea will be judged on:
– Innovation
– Potential to increase giving
– Incorporation of behavioural economics insights
The context
• Retail company; 600 stores across the country
• 11,000 employees; 212 signed up to payroll giving
• Presentations at HQ (no visits to outlets)
• Company matches first month’s donation
• Company supports Unicef; employees can choose
which charity to give to
The University of Bristol’s Festival of Social
Sciences and Law presents:
SCHOOLS CHARITY
CHALLENGE 2013
8 November 2013
Tweet @UobFutures #TF2013