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Tuesday, April 7, 2015

Is Charitable Giving a Fraught Choice?

Soren Kierkegaard wrote “Life can only be understood backwards; but it must be lived forwards.” So we routinely make decisions based on inadequate or incomplete information. How does this affect our charitable giving practices?

In Nudge, the authors describe our problems as what they term to be "fraught choices." A fraught choice is one that carries some sort of "freight." This means that the decision will have consequences or rewards, costs or benefits, that cannot be accessed or assessed when the decision is made. Thaler and Sunstein (Nudge, page 79) describe some classes of these choices:
  • those that have delayed effects
  • those that are difficult, infrequent and offer poor feedback
  • those for which the relation between choice and experience is ambiguous.
For example, I can ignore my dental health for some years before the effects of that apathy take hold. But the height of a raging toothache is not the time to begin regular brushing and flossing. 

Some people may retire several times and thus get some "practice" in such decisions. Most of us get one chance and then we live with the consequences of our decisions. 

And most of us make decisions about colleges without much clear sense of how one option might be better or worse than another. It may never be clear that our choice of that expensive private school trumped the less expensive state university, since we'll never have the chance to go back and test the alternative scenario.

Is our giving to a local congregation anything like these examples?

Giving to a local congregation can certainly be subject to a poor feedback system. Whether we give or not, it appears that the staff continue to do their work. Whether we give or not, it seems that the furnace runs and the air conditioning functions. The lights are on and the hymnals are in the pews. At best (or worst), the consequences of giving or not giving are delayed (or invisible).

By contrast, if I don't pay my own utility bills, the lights go out and the garbage accumulates. It would seem that giving may be experienced as all upfront cost and little experienced benefit. So giving sounds like a fraught choice.

And I may not be all that clear about what I expect to get by making the giving choice. Do I expect a certain level of "service" for my money? Many of our regular givers would resist such a notion. But if the sermons are unsatisfactory or the pastor is a pain in the neck or the denomination makes unpopular decisions, giving is going to decrease. Congregational giving is a "trailing indicator" of member satisfaction.

So parishioners may have the same relationship to "bad service" that Justice Potter Stewart had to pornography. They may not be able to define it, but they know it when they see it. And when they experience dissatisfaction, they are likely to respond. Once again, giving sounds like a fraught choice.

Now, why does this matter? If Thaler and Sunstein are right (and experience shows that they are), fraught choices are those most in need of helpful nudges. Anchors and primes, context and commitment, reports and guidelines are all designed to be such helpful nudges as people make their (fraught) giving decisions.