The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life (29 page)

All told, our research suggests that giving is less about doing something good for others and more about doing something good for
oneself. “This is less depressing than it may sound,” wrote David Leonhardt, who summarized our results in the
New York Times Magazine
as follows:

For one thing, the charities are still getting the money, no matter what the donors’ motives are, and many of them are putting it to good use. For another, the warm-glow theory means that philanthropy can be more than a zero-sum game. If giving were strictly rational, the announcement of a big donation might lead other people to give less to the cause; they might figure it no longer needs their money as much. Thanks to the warm glow, though, Warren Buffett’s $31 billion gift to the Gates Foundation won’t cause other people to think that they no longer need to help fight dysentery. If anything, Buffett’s gift might make them more likely to make a donation. They can then have the sense that they’re joining forces with someone else—with Warren Buffett, no less—and becoming part of a larger cause.
²²

This is a key point, and one that cannot be understated: while human behavior might seem irrational, everything changes once you understand what motivates people to act. Once you understand people’s motivations, you realize that their behavior is, from their point of view, quite rational. We are all just trying to satisfy different wants and needs, but these don’t fit into traditional, boxed-up assumptions, fixed ideas and hand-me-down recipes and traditional ways of doing things.

As we observed in
Chapter 1
, for example, people imagine that a gym membership will inspire them to work out far more often than it really does. So they purchase the monthly membership in hopes that will be the case. They may end up not working out as often as they planned, but they had a rational reason for signing up in the first place.

Returning to our experiment on matching gifts, then, it makes sense that having a match in place works, but that higher match levels work no better than smaller ones. As an example, consider what some economists claim is a major national problem: we do not save enough for our retirements. How do most of us save? Usually our employers match what we place in a 401k retirement savings plan. As our colleagues Richard Thaler and Cass Sunstein point out, people who put money into their 401ks contribute
exactly
the same amount that triggers the match. If an employer matches the first 5 percent of salary 1:1, then people will save exactly 5 percent of their salary. But if an employer matches the first 5 percent of salary 1:2 (the employer contributes $0.50 for each $1.00 that you save), then people
still
save exactly 5 percent of their salary.

This might have seemed puzzling at first, but it is directly in line with our findings. So, can we leverage this behavioral insight to make the world a better place? If we are convinced that people need to save more, here is what we can do. Companies that currently match the first 5 percent of salary 1:1 should simply say, “We have decided to change our retirement plan. We will now match the first 10 percent of salary 1:2.”

What will happen? Let’s say you are someone who currently earns $50,000 per year. Under the old regime, you will personally save $2,500 and your employer will match with $2,500, for a total savings of $5,000. Under the new scheme, you will save $5,000 and the employer will match with $2,500, for a total savings of $7,500. By simply changing the rules, the employer has raised your savings and it does not cost the company an additional penny. Assuming the US government supported such a change to 401k rules, a simple policy solution could be put in place, and you and millions of others would save much more.

In the end, giving to charity is nothing like purchasing a Snickers bar; it’s more about doing the right thing and joining a fight, and feeling good about what you give. In this way, giving to charity is just as much about your personal proclivities as it is about the effect of your gift. If you are a silver-haired CEO of a philanthropic organization, then, you must understand that donors respond to triggers that are different from the ones you have traditionally applied, or your charity will not reach its potential.

In the next chapter, we’ll explore strategies that a specific charity used to raise money and learn more about the ways people respond to one special “trigger.”

          
CHAPTER TEN

       
What Can Cleft Palates and Opt-Out Boxes Teach Us About People’s Reasons for Giving to Charity?

          
The Remarkable Phenomenon of Reciprocity

Smile if you recognize this face:

If you don’t know her, you should. Her name is Pinki Sonkar, and she’s the star of a 2008 Academy Award–winning documentary called
Smile Pinki
.

Pinki was born in the poor rural village of Mirzapur, India. She spent her days sitting in the corner of her house. She dared not go outside because people would point and stare at her.
She wasn’t even allowed to go to school. She felt hurt and angry and wanted to know why she was different from others. Her father was certain she would never be able to marry and said she would be better off dead. One day, she met a kind social worker named Pankaj who, in turn, introduced her to a doctor named Subodh Kumar Singh.

Do you recognize her now?

Pinki’s was no uncommon malady. Approximately 35,000 Indian children are born with cleft lips and palates every year, and millions around the world suffer as Pinki did. Their parents, who can’t afford surgery, often leave them in ditches on the side of a road, feeling as if a curse has fallen on them, and the children who aren’t abandoned are kept hidden away in shame. Eating and breathing is difficult for them. If they survive, children with clefts are shunned by their peers at school and by their communities.

The faces of children with cleft lips are ubiquitous, thanks to Smile Train’s ads in newspapers, magazines, and, of course, the award-winning film. The ads have generated millions of dollars in donations for the charity, which offers free surgeries to children in developing countries around the world who suffer from this common, easily corrected birth defect, one never seen in the United States because it is corrected shortly after birth.

Today, Pinki is a hometown celebrity. She has many friends, and she likes to wear lip gloss.
¹
And she is one of 100,000 kids around the world who get their cleft palates fixed for free annually because of some out-of-the-box experimental thinking on the part of one Brian Mullaney, the cofounder of Smile Train and
WonderWork.org
.

In the previous chapter, we learned that people are motivated by many things—their own human desire for a “warm glow” feeling, among others. Here, we’ll show how a unique field experiment using direct mail, and based on principles that apply equally well in business, made a huge difference for Pinki and millions like her by appealing, once more, to a fundamental human desire.

A Sister’s Curse, a Brother’s Gift

Brian Mullaney is one of those curly haired, blue-eyed, fighting-Irish guys you meet in an airport bar during a long layover. The light in his eyes shines with intelligence, candor, and a dancing, catch-me-if-you-can entrepreneurial spirit. He has a friendly, distinguished, Harvard-by-way-of-Ohio way of speaking that is simultaneously incisive and casual. You sit down at the bar, and he asks you your name, where you are off to, and what you do for a living. Soon you find yourself buying him a Guinness, passing him a business card, and saying, “So what about you?” Then, shoulder to shoulder, you listen to his story.

Mullaney, who was born in 1959 in Dayton, Ohio, is the second-oldest of five children in a strict Catholic family, the son of a line of lawyers on his father’s side. His paternal grandmother, Beatrice, was one of the first women to graduate from Boston University Law School in the 1920s, and she became the first female judge in Massachusetts. His father, Joseph, graduated from Harvard Law School after spending some time in the ROTC; he rose to become a government and corporate attorney, and eventually a vice chairman of Gillette. His stay-at-home mom, Rosemary, was a product of Stone-hill College and Brandeis University.

The Mullaneys were a tight-knit, happy family until tragedy struck when Brian was eleven. His adored, beautiful little sister Maura contracted a high fever and was diagnosed with an autoimmune
condition called Stevens-Johnson syndrome, which resulted in a bloody rash that spread and blistered, eventually causing the top layer of the skin on her face to die and peel away in sheets.

Within weeks of the fever, Maura went from being a healthy, pretty eight-year-old to what Brian Mullaney describes as a “ninety-year-old shell” bound to a wheelchair. Though she was blind and in constant pain, she bravely tried to return to school. But the other children teased and taunted her. Brian protected her as best he could, but he deeply resented the fact that Maura was ostracized on the basis of her looks. She died at the age of ten. Brian was only thirteen, and yet he keenly felt the injustice of the treatment Maura received from those who did not understand her suffering.

After what happened to Maura, Brian transformed from a pious, well-behaved altar boy to a rebellious, indignant, out-of-control teenager who cared only about basketball and hanging out with his friends. By the time he was in the ninth grade, he was flunking out. His parents yanked him out of public school and marched him to a private, jacket-and-tie boys’ school where kids who got
bad
grades were teased. So he turned himself around and wound up going to Harvard, where he majored in business economics and began sharpening a healthy disrespect for status-quo thinking. He started by producing editorial cartoons for the Harvard
Crimson
.

The cartoons, some of which poked at hypocrisy, got him in trouble. In one cartoon, which he produced when the openly gay Massachusetts representative Barney Frank was first running for office in 1980, Brian ribbed the Catholic Church, whose priests were telling parishioners not to vote for Frank. The cartoon showed two men leaving church after confession, where the priest has told them to atone for their sins. One says to another, “I didn’t mind the
20 Hail Marys for cheating on my wife, but the 50 Our Fathers for voting for Barney Frank was a little too much.” “The Catholics on campus hated me for that,” Brian says.

But things got much worse when he made fun of the policies of Harvard’s nascent Third World Center. The center, which was going to be dedicated to serving the needs of minority students, stipulated that no white people could serve on its board because Harvard already had too many Caucasians. In his cartoon, Brian—who hated racism of any kind, including the reverse sort—drew a picture of a castle with a sign that said “No Whites Allowed” on it, and a caricature of the then president of Harvard, Derek Bok, handing bags of money to a black man and a Chinese man on the steps. The caption showed Bok saying, “Go away, Honkey. It’s President Bok, and I’m here with your funding!” The black students went wild, labeled Brian a racist, and stormed the editorial offices of the
Crimson
. The editor hid under his desk, and Brian was forced to hire personal protection and a defense attorney. “It was horrible,” he recalls.