The motives for altruistic behaviour

 

A couple of old proverbs warn that while we should “never look a gift horse in the mouth”, we should, nonetheless, “be wary of Greeks bearing gifts”. What this means in our modern times is that whenever someone receives a gift, we should ask ourselves what the donor stands to gain from such an act [1]. This is because economic theory, with its emphasis on self-interested behaviour, argues that when individuals perform an act, they do so in expectation of receiving something in return for their efforts. This expectation of some reciprocal benefit is not, of course, limited to market transactions only, but applies equally well to non-market resource transfers and philanthropic acts, where close inspection may reveal that altruists expect their generosity to be of some benefit to them, even if they deny having such a motivation. This is because altruism, like other acts, may be a form of strategic behaviour where, in order to achieve a particular objective, an individual may need to act in a contradictory manner which at first glance appears not to be self serving [2]. While this concealment of intent may seem paradoxical, it is possible that some people may only be able to maximise their utility when they engage in such behaviour. This section examines some of the primary factors that motivate different parties to behave altruistically. It should be noted that sometimes people can behave altruistically due to only a single factor, while at other times they can be driven to do so by a combination of the factors listed below. Regardless of this, whenever they voluntarily transfer resources to another party, these parties expect to receive some form of benefit from their generosity.

 

i) The public goods motive

A person may, at times, act in a philanthropic manner if he believes that such behaviour will help create a public good that provides him with either a direct or indirect benefit. One example of altruism aimed at receiving a direct benefit is that of the contributions made to fund medical research working to find a potential cure for cancer. Although a donor may express concern at the plight of current sufferers when making a donation towards this cause, his primary concern may be to speed up the rate at which a cure is found, so that should he, sometime in the future, also be diagnosed with this disease, then a cure may be available for his use sooner than it otherwise would be. In such an event, his donation is intended primarily to provide a personal benefit, although other individuals benefit at the same time from this act due to its public good nature (since they cannot be prevented from being offered this cure).

 

A person may also make a donation if he wants certain parties to benefit from consuming a good that is currently not available on the market, even if he himself does not receive any direct benefit from the act of consumption that follows. This is arguably what Smith meant about such altruists when he wrote “there are some principle in his nature, which interest him in the fortunes of others, and renders their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it” [3]. In this case, while the donor may not receive any tangible physical or financial benefit, he does receive some indirect pleasure from knowing that he has provided a good that is deemed to be “desirable” and worthy of consumption by others. Gifts falling into this category include the bequests made by individuals such as Rockefeller and Rhodes to philanthropic institutions that they had founded in order to provide public goods in fields as diverse as education (e.g. scholarships and libraries), health (via hospital facilities and medical research centres) and culture (through art galleries and auditoriums) - in many of these cases, the donors did not receive any direct benefit from their altruistic acts as these public goods were only provided long after they had died. However, it is possible that while alive, they may have received an indirect benefit by knowing that their names and deeds would be recorded for posterity due to the positive impact that their generosity had on others.

 

ii) Religious convictions

Since early history, religious beliefs have played a major role in guiding the manner in which people have acted and thought, not only about themselves, but with respect to others as well. Now, while the direct influence exerted by many religious bodies has waned considerably in recent years, the core philosophical values that they advocate continue to have a residual bearing on the lives of billions of people worldwide. One of these basic values, shared by many faiths, has been that people should act charitably towards others, with religious tracts exhorting followers to be as interested in the welfare of others as they are in their own, through the use of slogans such as “love your neighbour as you love yourself”.

 

The widespread willingness of followers to act benevolently has meant that religious bodies have been amongst the most successful recipients of donations, with followers donating a steady share of their income, assets, and time towards causes and activities that promote the “work of God”, such as education, health care, and missionary work. Despite this, doubts exist as to whether people who donate due to religious beliefs are driven solely by the love of their fellow man to be charitable, or if other factors play a role in their generosity. This is because religious teachings have often implied that if followers are charitable and donate alms, then they will be rewarded by having moral redemption for their earthly sins [4], as well as immense riches in the afterlife [5]. If it can be proven that such powerful incentives of eternal salvation (or damnation) are a major factor in motivating people to be charitable, then it is obvious that they are once again acting in order to increase their self-interest since they expect some reward for their goodness.    

 

iii) Political opportunism

For many people, partaking in the activities of a charitable organisation has proven to be an ideal point of entry should they wish to enter into a career in politics. This is since working for charities enables them to develop their leadership and management skills, as well as show, in a highly visible manner, that they are interested in the welfare of those whom they are assisting [6]. This can then enable them to raise their public profile and build up a support base, as well as help them to cultivate contacts with politically powerful individuals, all of which may be of great use to them once they decide formally to enter the political arena [7].

 

Along similar lines, charity work is often recommended for workers who seek to enhance their career prospects with an employer. By contributing her skills and time to charitable events, particularly those organised by an employer, it is possible for an employee to come to the attention of her superiors, and thereby gain their approval. An example of this phenomenon is that of a young attorney who, in her endeavour to become a partner in a law firm, decides to take on legal aid cases in her spare time. Although such pro bono cases do not generate any revenue, because of their visible and charitable nature, they are often considered to be very valuable in generating substantial public goodwill in favour of the firm, giving it a useful intangible asset. This is likely to impress the partners who, when reviewing her candidature for elevation to partnership level, are likely to gain a more favourable impression of both her moral character and her willingness to work in furthering the good name of the firm. In such situations, it can be argued that undertaking unpaid work is not entirely due to a person’s altruistic nature, but because she believes that doing so will lead to greater rewards for her in the long run.

 

iv) The social motive

This motive has many of the same characteristics as the political opportunism motive, although in this case the objective is not to seek political or professional advancement, but rather to obtain or maintain a position of social standing within a community. Nevertheless, the basic intuition remains the same, as altruistic acts are undertaken in such a way as to win the approval of a peer group, who are the “voters” in this instance.

 

The social giving of gifts has been the subject of much research by social anthropologists who, in their studies of “primitive” pre-industrial societies, have discovered that gifts play an important role in initiating and maintaining the complex social relations that exist between individuals. As such, they are rarely given by a donor in a voluntary, disinterested manner, but are rather provided with the intention of achieving a specific purpose. One frequently cited example of how gifts are exchanged in a social setting is that of the “potlatch” ceremony, performed by the Kwakiutl Indians of Northwest America [8]. In this society, the prestige of an individual is intricately linked to how much wealth he can afford to discard, with men who seek to be acknowledged as having the status of “chief” dispensing with vast amounts of valuable resources, particularly blankets, in a highly ritualized ceremony of gift giving. In such situations, these donors are not really giving away their property because they are altruistic and interested in the well-being of recipients, but rather because they seek to impress upon observers that they are worth respecting [9].

 

Similar behaviour appears in modern societies, where the value of a donation demonstrates how conspicuously a person can afford to consume different goods and services [10], of which charity is one [11]. This is arguably the rationale behind the holding of society or debutante balls, which, although ostensibly in aid of charity, serve as an opportunity for donors to flaunt their wealth in subtle ways, such as showing that they can afford the high ticket prices and expensive accompanying accoutrements (e.g. designer clothes and jewellery) that are generally associated with such events. To critics, if these donors really felt altruistic, they could just as easily have remained at home and sent a cheque off to the relevant charity equivalent to the costs they would have incurred to attend such events. This, however, overlooks the fundamental point that these donors would then be unable to show off their wealth to their peer group.

 

v) The economic motive

One government mechanism that encourages people to behave altruistically, even if only for income purposes, is the taxation system. When donations are allowed to serve as tax deductions, then, ceteris paribus, an increase in private income or in tax rates can be expected to lead to an increase in the absolute value of the donations made by taxpayers [12]. By donating even a small sum of money, taxpayers may be able to reduce their tax incidence, since the deductions that arise from their donations may move them into a lower tax bracket. As the relative cost of altruism decreases, they may donate more that they otherwise would give, with the government underwriting a portion of their donation in the form of lower tax receipts. Thus, while the monetary expression of a persons’ altruism may rise (as expressed by the numerical value of the donation), the actual desire to give may remain unchanged, as that person may realize that by giving away a little bit more money to charity, even more is saved [13].

 

Businesses may also engage in what appears to be altruism if they feel that they can benefit in some way from doing so, with various techniques to achieve such aims being used. One example is known as cause related marketing, where a business states that it will donate a portion of the receipts from the sale of certain marked items to a selected charity. When consumers know that such a donation will be made, then they are more likely to shop at the “altruistic” store than at the competitors [14]. Now, if a seller can mark up the price of these specific goods in such a way as to ensure that even after the relevant share to the appointed charity has been deducted it can still make a profit on selling the item, then it may not be truly altruistic – if it knows that the percentage increase in volume sold will exceed the percentage fall in profit made per unit, then engaging in this marketing will allow it to increase its profits, even though the public may not realize this. Another form of dubious altruism involves placing collection points at store entrances, where customers can deposit goods to be passed on to charities. By erecting these donation points within or at the entrance to their premises, businesses, especially supermarkets, will encourage customers to purchase those goods they intend donating from them rather than from competitors, allowing them to free ride and profit from the altruism of their clients [15].

 

Corporate altruism has also been examined in the context of how economic forces function in the aftermath of a natural disaster, when large-scale wealth destruction has taken place. During such periods, the market price for necessities, such as food and clothing, would be expected to rise substantially as survivors competed to purchase whatever stocks remained of such goods. By allowing prices to rise in response to demand, sellers would benefit immensely, as they would be able to make substantial profits in the short run, until the arrival of new supplies pushed prices back down. On many occasions, this situation has failed to develop in the manner predicted by economic analysis as sellers, citing their “community spirit”, provided large quantities of aid to disaster victims and kept prices in stricken areas at their pre-disaster levels. While such altruistic actions may not, at first sight, appear to be profit maximizing, they are really in the best interest of the seller. This is since any loss in immediate profits that may result from selling at unchanged prices may, in the long run, be more than offset by an increase in the goodwill that is generated from helping the community in its time of need [16]. This is of special importance if the seller intends to remain in the disaster area after recovery, as this goodwill can then be used to good effect when trading with survivors as they go about rebuilding their lives [17].

 

vi) The Kantian motive  

Finally, we encounter the case of pure altruism, where the donor supposedly acts in a totally unselfish manner by making a donation without expecting to receive any benefit whatsoever in return from such an act. When a donor acts in such a fashion, she is said to be inspired by the “Kantian” motive, which is named after the philosopher Immanuel Kant, who argued that the “goodness” in any act required that the desire to perform it should be divorced entirely from any benefit that may ensure to the person performing it [18]. In other words, for a person to perform a good deed, she should be inspired only by the goodness of the act itself, and not by the goodness of the benefits that may arise subsequent to its performance.

 

However, it can be argued that even this motive is not entirely free of self-interest, as the donor receives a “psychic” benefit from being an agent in the creation of a good deed. Although this benefit may be hard to quantify in terms of a normal utility function, it can best be described as being the feeling that we have of easing our conscience (which is the “man” within our heart [19]). Although sceptics may feel that no utility or benefits can be derived from simply doing good deeds, we should note that while in theory a donor could perform a multitude of charitable acts benefiting many people, in practise, such opportunities are limited by both monetary and non-monetary constraints. If the donor is to avoid donating in a random manner, then some form of ranking system must be developed where different charitable acts are categorized in order of how “good” they are. Thus, if the monetary value of different acts is identical, it will need to be on the basis of this weighting of goodness that an altruist decides whom to support, as any psychic benefits received will be ranked in accordance with the valuation of an act’s goodness. To prove the validity of this concept, we can conduct a hypothetical experiment that asks people whether a fixed, indivisible sum of money should be donated to building a shelter for either orphans or former politicians. It is extremely likely that in a random survey of the general population, we shall find that most people would prefer to have the money donated in favour of the orphans, as they are more likely to associate more “goodness” with this particular act than with the alternative option (in which case, the donors receive greater psychic benefits from such a choice).

 

From the above analysis, it could be assumed that the only truly worthwhile motive for altruistic giving is the Kantian motive, where the most that a donor receives in return for a donation is a warm inner feeling from having performed a good deed. However, it cannot be argued that the other motives are less worthwhile or should be looked down upon as having no redeeming features whatsoever. This is because if people were to donate only because of their kind-heartedness, then recipients, especially charitable organisations, would be likely to receive substantially less funding than they currently collect. This is since there are limits to the extent to which people are willing to make donations without receiving any tangible benefit in return, especially if they feel that others are free riding and not contributing their “fair” share of donations. As such, if charitable bodies expect to receive more funding from private parties than they currently obtain, then donating for all the “wrong” reasons should be encouraged. This is because it is only through appealing to the self-interest of individuals that free riding can be countered, resulting in an increase in the value of donations made. Otherwise the only alternative available will be to approach government for assistance, so that this body can ensure that the level of altruism believed to be socially desired is collected through the involuntarily imposition of taxes. With this possibility in mind, we move on to the next section, which looks at how, over time, different third-party agencies have played an increasingly important role in ensuring that an “adequate” level of resources are dedicated towards altruistic aims.

 

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