When I was in 5th grade I participated in a charity event called "Jump Rope For Heart". People donated a certain amount of money per rope jump. I found myself wondering why it was structured that way – after all, people didn’t really care whether I jumped or not.
Many charitable events are structured this way, though typically they involve public walking.
Why do they work this way? Why not ask for lump-sum donations rather than having a bunch of people dig fence post holes? Is it make-work bias? Is it the labor theory of value? Maybe instead my willingness to jump/walk or otherwise participate indicates my commitment to the cause and in some sense certifies the event? A band-wagon effect? Maybe the dollar amount per unit of effort (jump, miles walked, etc) is so low that it induces people to donate more money than they would otherwise?
Rather than paying somebody to do busy-work, why not instead pay people to do something productive, such as soliciting even more donations?
Consider publicity as the main scarcity a charity faces. If you elicit volunteers to walk, run or skip rope for you, those persons will talk up the activity — and the charity — to their friends, both ex ante and ex post. They’ll even wear your T-Shirt "Cystic Fibrosis Marathon."
Since most of the people are exercisers anyway, the charitable activity doesn’t cost them much on net. In fact the exercise is one way of expressing a greater commitment to the charity and may encourage subsequent donations. Commitment, of course, is not infinitely elastic in supply. So some of the person’s commitment may be transferred to the charity and away from the ideal of personal exercise. Counterintuitively, in the long run the person may end up less fit but more committed to the charity. In other words you’re paying with some of your health and discipline rather than with your money.
I think it’s a tax issue.
I often wondered why the dance-a-thon couldn’t be a window washing-a-thon, or lawn-mowing-a-thon. But I think the answer is that if it were productive work, then according to the IRS, the value of that work would have to be removed from the charitable deduction, because a service would be being performed. So you couldnt’ get a write off of 50 bucks for giving the window washer 50 bucks, maybe only 20 bucks, but you could get the 50 dollar donation write off for giving the jump roper 50 bucks.
Sorry, just realized a small problem in my previous post. In order for us to donate $50, I only have to pay you $40 and you contribute $50, at no total cost to you since you get $10 back in taxes. Thus, the incomplete contract explanation is not an issue, since we don’t need two transactions (I give you $50, you give me $10), we just need one (I give you $40).
Also find the tax argument weak. What about a charity carwash? A useful product with a commercially available equivalent is being delivered for a charitable fee. The event becomes a way of bringing people together for a bit of physical fun.
Would it be more effective to channel one’s labour into a constructive activity such as building a house like Habitat for Humanity? Well, yes. I think that part of the purpose of these events is to equate doing social good with a healthy physical activity. WOne therefore has a 4 pronged way of attracting a donor:
1. the activity represents a healthy structured activity promoting good physical fitness and social responsibility
2. it’s harder to turn down a child than an adult fundraiser
3. the child’s commitment to a higher level of commitment makes giving a donation look like a very low level of commitment by contrast (it guilts us out)
4. social pressure is used to extract donations from friends, neighbours & relatives who
Ultimately, it is economics that decides whether these types of events are pursued. They either raise funds or they do not. The fact that the tradition continues seens to indicte efficacy at raising money and converting the next generation to your worldview.
I think both analyses miss an important component of the research puzzle: the utility extracted by the race participant. I’ve found that many participants are hardly altruistic; rather, they either use the race as a commitment device for jumpstarting a rigorous training regimen to get in shape, or as an outlet to further their own athletic interests. Many participants are avid endurance atheletes, and this provides a public setting in which to compete. The charitable dimension is just a patina of social-consciousness.
It is about shame. When someone asks you to sponsor an event for charity they get you to write down your commitment on a document that is usually circulated in work places or among friends and family. Your failure to contribute is therefore public and a cause for shame. If they simply ask for money from you, your refusal (if you refuse) is a private affair. If they demand money and threaten to publish your name if you refuse, it becomes extortion and you would refuse on principle, without shame. By attaching the demand for money to an activity they shame you into donating and sweeten it often by giving you something in return (a spectacle, communal event etc).
There is a deep human need to sacrifice for others. It’s tied up with self-worth, social signaling, and spiritual ideals. I’d say it’s biological.
For charities, the money is coming from donors, so in many ways, they are the customers. They are paying for the service of feeding this need. Handing over a check is fine. But, burning through the last 5 miles of the marathon “for breast cancer” can be very satisfying.
It’s not efficient in the simple sense. But, I don’t think we can understand it if we ignore this aspect of it.
Around here, a lot of people do those charity bike events like Team in Training and the AIDS Ride. As a cyclist, I hate them. My reaction is, “Why are you asking me to pay for your vacation?”
They present bike rides and bike tours as something disagreeable, only worth doing for pay, when in fact they’re a delightful way to spend a morning, a day, a week, or a summer. At least with charity dinners, the person who makes the contribution gets to eat the dinner.
It’s reciprocity.
Humans are hard-wired to engage in (personal) exchange, not to just give stuff away.
Cardinal Fang,
The money you give to a team in training runner, for example, does NOT go to paying for their vacation. It goes to the charity. The runner pays for the costs of the trip/hotel/etc when they travel to the event. At least that’s what my brother did when he did team in training.
Partly because some people will only fundraise if they are getting something in return – in this case, an experience.
Partly because the events are a wonderful bonding opportunity for people in similar situations e.g. Relay for Life – yes, that consultant mentioned upthread might have been better at his job if he had slept; he might also now be better at his job because he took some time out to be with patients and survivors rather than seeing them as statistics.
Partly because the events are free publicity.
Partly because the events promote something the charities want to promote anyway e.g. cancer charities usually want people to do more exercise as it reduces your risk of getting cancer ergo encouraging people to go for a run to make money is more inline with policy than encouraging them to come to a glitzy dinner and eat fatty food & drink alcohol.
Partly because they are usually big income drivers for charities – here in the UK, ten years ago there was really only the London marathon. Now there are nigh-on hundreds of events: the marketplace is reaching saturation, but charities wouldn’t have started setting up such events if they didn’t bring in funds as most charities simply don’t have the resources for things that don’t bring in more income (even when the events are sponsored by a private company, as the company usually wants some kind of ROI).
Partly because (as suggested in the last paragraph of the question) paying people to solicit more donations usually backfires – you would be surprised how many people expect charity workers to work for free. I have rent to pay like everyone else, to go alongside my bleeding heart.
My wife’s a professional fundraiser and has a master’s in non-profit organization. I ask her a variant of this question at least once a year. Her eloquent response usually goes along with the Hegelian thread, mentions that Ben Franklin used peer pressure in philanthropy, and the fact that the donor wants to feel close or connected somehow to the recipient. She’s said that our cultural mores are also a factor: prayer, fasting, and rending garments are no longer fashionable methods to demonstrate one’s concern. Combining philanthropy with a recreational activity, vapid as it seems, however is.
I’m with Cardinal Fang. Some of the cycling or tri events not only end up paying for somebody’s vacation (AIDS rides being notable for this), but spreading the crazy idea that cycling is suffering rather than fun.
from http://www.sheldonbrown.com/thons.html
“The problem with translating the “walk-a-thon” into the “bike-a-thon” is the application of the concepts of “sacrifice” and “suffering” from walking to cycling. Cycling shouldn’t be seen as a painful ordeal; cycling is fun! Could you imagine a “Cine-thon” where participants asked for pledges based on how many movies they watched? How about an “Ice-Cream-a-thon,” in which people would give contributions based on how many ice cream cones you ate?”
“What about a charity carwash?”
Because when I’ve taken a part of a charity carwash (usually to fund a sports team or something) we didn’t report the income earned to the IRS. I doubt the people who bought the carwashes asked for a tax deduction as well. Secondly, in order for me to deduct the charity donations from my taxes I would need to itemize my taxes. I would also need to be in a similar tax bracket as the donor for it to work out with zero loss. Lastly, I would be trading $10 now for a return of $10 when I do my taxes. Hardly an ideal trade.
Brutus, I’m sorry that your friend doesn’t think the weekend 170 mile ride to Provincetown and back will be fun, because most of the other riders will enjoy it. I don’t know about ZBicyclist, but it sounds like a lot of fun to me.
I did a one-day 112 mile ride this weekend, with a lot of other riders. It wasn’t a charity ride; we just paid the club that put it on. During the ride (which was fun), we encountered the first day of an AIDS ride. Those riders were having a blast, as far as I could tell.
In my opinion, your girlfriend should stop martyring herself and leave the riding to the many cyclists who love to ride, unless, as I suspect, she actually does expect her 170-mile ride to be a terrific experience, which I think it will be.
I prefer to think that they are paying for your discomfort. That’s the simplest explanation, and fits best with my general theory of humanity.
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