Prosocial Spending – aka, Charity – is a Psychological Universal
You’re walking down the street, and you see someone holding a sign, asking for help.
Just $20 for gas, $5 for food.
You feel the urge to give. You want to help.
While you might assume generosity and giving is not a universal value, this tug on the heartstrings may be more common than you think.
In the last post, we talked about prosocial behavior – i.e. care given to other people and one’s community.
Prosocial spending – or charity – is one part of prosocial behavior.
It’s defined as using one’s financial resources to help others.
One study of over 600 North Americans showed that those selected at random to spend a small windfall of money on others were significantly happier than those directed to spend it on themselves.
And this happiness derived from generosity was found to be universal.
Research on Prosocial Spending and Well Being shows that those who give have greater well-being, the world over.
When survey data was analyzed across 136 countries using Gallup World Poll data, the study found that humans on a whole derive happiness and other emotional benefits from helping others financially.
As the study reads,
“In contrast to traditional economic thought—which places self-interest as the guiding principle of human motivation—our findings suggest that the reward experienced from helping others may be deeply ingrained in human nature, emerging in diverse cultural and economic contexts.”
Apart from the surveys, the researchers went on to conduct experiments for causality in two widely different countries: Uganda and Canada.
Here’s what they found.
Uganda vs. Canada: Well-Being and Prosocial Spending
While controlling for household income, donating to charity had a positive effect on life evaluation/well-being across the board.
The study also found that while people in wealthier countries were able to donate at higher rates, the well-being was not greater.
Well-being based on giving monetarily is only weakened in less wealthy nations due to the infrequency of donations.
When investigating Canada (which falls within the top 15% of countries based on per capita income) and Uganda (which falls in the lower 15%), the study found that 66% of respondents in Canada reported donating frequently while only 13% did in Uganda.
However, the experimental study went on to assess prosocial spending in different cultural contexts other than charitable giving.
Approaching students at random on campuses in Uganda and Canada, researchers asked the participants to describe their experience after spending 10,000 Ugandan shillings or 20 Canadian dollars (each of which has equal buying power in these two countries) and also rate their happiness on the Subjective Happiness Scale.
Others were asked to rate self-spending and their corresponding happiness.
As past studies have shown, those who spent on others reported higher levels of happiness than those who spent on themselves.
But what emerged about the cultural differences in spending was interesting.
In Uganda, those who purchased something for themselves described a personal necessity at three times the rate as those in Canada.
Additionally, Ugandans were more likely to have purchased something for others in response to a negative event, like medical services or supplies, while the same result was not met with at all in Canada.
Despite these differences in spending on others, the emotional benefits were the same in both countries.