Charitable donors frequently support organizations without adequate information about their impact. Without relevant data, funds may not benefit the most impactful charities. Information is costly, and if donors bear those costs, they may not secure the necessary data. A study conducted with nearly 2,000 US adults examined how these information costs affect charity selection. Participants could choose from ten hypothetical charities, all aiming to save lives, and decide who would pay for information regarding the charities' impact per dollar. Shifting information costs could result in an estimated $7 billion increase in effective charitable giving.
Charitable donors often make gifts despite having little information about the organizations they support. Without relevant data, that money may not flow to the charities that evidence suggests are delivering the biggest bang for donors' bucks. Shifting information costs could potentially unlock about $7 billion worth of additional impact.
In 2023, a study estimated how much impact may be lost when donors incur information costs themselves. Participants chose from 10 hypothetical charities that all had the same mission: 'To save lives.'
The study involved nearly 2,000 US adults to understand whether information costs influence how donors pick charities. Donors can try to get the most impact per dollar by supporting charities achieving high impact at low cost.
Half the time, participants could pay for the information themselves out of their budget; in the other half, they could have their partner pay. The total amount spent stayed the same.
Collection
[
|
...
]