INFLUENCE OF INTRINSIC AND EXTRINSIC FACTORS ON...

aInternational Journal of Research in Economics and Social Sciences (IJRESS) Available online at: http://euroasiapub.org Vol. 7 Issue 12, December- 2017 ISSN(o): 2249-7382 | Impact Factor: 6.939 |

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INFLUENCE OF INTRINSIC AND EXTRINSIC FACTORS ON CHARITABLE GIVING: A

STUDY OF BANGALORE URBAN DISTRICT

Ms. Nayona Banerjee1

Student, BA Economics(Honours), Christ University, Bangalore, Karnataka, India- 560029

Greeshma Manoj2

Assistant Professor, Dept of Economics, Christ University, Bangalore, Karnataka, India- 560029

Abstract

In today's modern world where scientific and technological development is highlights of any given field,

philanthropy and market related to it is no different. With change in time, a dire need has come to

reconsider and analyze our assumptions and knowledge with regard to factors influencing charitable

giving. This research is focused on analyzing the effect of various extrinsic and intrinsic factors on shaping

up the intricate behavior or mindset that leads to charity. The research is based on primary survey collected

with the help of structured questionnaire. A diverse sample population in terms of gender, marital status,

income, educational qualifications and age was taken with sample strength of 100. Results of the factor

analysis indicates that among the various factors, warm glow was found to be the most dominant factor in

influencing charity giving.

Key Words: Charitable giving, charitable behavior, philanthropy, altruism and warm glow.

International Journal of Research in Economics and Social Sciences (IJRESS) Vol. 7 Issue 12, December- 2017 ISSN(o): 2249-7382 | Impact Factor: 6.939 |


(An open access scholarly, peer-reviewed, interdisciplinary, monthly, and fully refereed journal.)

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1. Introduction

Economics is based on the assumption that people are self-interested, and as they are rational beings

they make the choice that suits the best at that time. This phenomenon is called the 'axiom of rationality'.

This asserts that pursuit of self-interest is the only thing that is done by rational individuals and anything

else is irrational. Thus many economists have been trying to analyze the individual‘s behavior towards

philanthropy through this framework.

Due to the aforementioned assumption, a fundamental question which arises usually in various

disciplines is concerns regarding the motivations underlying voluntary and involuntary donations to

charitable activities and other forms of charitable behavior. One hypothesis states that an individual‘s

behavior is generally governed though altruism where an individual is concerned over the well-being of

the recipients of the charity. But also noting that people derive private enjoyment from the act of giving,

several economists have also considered the warm glow motive in their study of the charitable behavior.

Giving to charities broadly undertakes two major forms: volunteering and monetary donation. The

investigation of how and why people donate has been extensive and has uncovered plethora of variables

that may influence the decision to give. A vast array of literature determining the characteristics of

individual giving exists which indicates that the potential factors behind charitable giving can be

distinguished into extrinsic and intrinsic determinants. The extrinsic determinants represent the socio

economic profiles of the donors, and intrinsic determinants address the underlying psychographic and

attitudinal factors for supporting a charity.

The existing literatures also show that the charitable motive arises from various motives, attributes and

demographic attributes. Some may give for altruism or egoism whereas other might give for tax

deductions, humility, obligation or mercy. Some of the major motivations being age, education, gender,

etc., the positive giving rates have given rise to the search of new economic models which heavily

influences decision-making behavior of individuals. Furthermore, examining the relationship between

affinity to a religious congregation and charitable giving is also of a particular interest. However the

motivations and attributes of the charitable givers are not very clear. The central question which arises

through the literatures is that what are the determinants of positive charitable behavior and what are

the disparate characteristics of the potential givers.

To understand the charitable behavior of individuals, a multi-disciplinary perspective of it plays an

important role. Although the economic analysis of charitable giving gives a satisfactory insight into the

charitable market along with an economic perspective, psychological inclinations of individuals also

influence an individual‘s decision making. Various psychologists have come up with disparate theories

to understand the behavior, the approach of scope insensitivity showing its dominance. The theory of

scope insensitivity puts forward that an individual‘s compassion, generosity and willingness to give

decreases as the number of people suffering rises because the individuals fail to grasp the intensity of

the number of people and hence lose the power to comprehend. The donors tend to experience

compassion for single identified person in need. As the number of people increases, active feelings and

action may begin to diminish. Hence ‘compassion fade’ has some major implications on the welfare of

the society.

A brief history of giving reflects that even through unconventional methods, the practice of charitable

giving has been popular since thousands of years. It has its place in the history books since ages and is

still growing in popularity. Reviews, research and conduction of various studies in the field in social

psychology have dealt with helping behavior (Batson 1998; Piliavin & Charng 1990; Schroeder et al




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1995; Schwartz 1975). Charitable giving occupies a major part in applied social psychological studies.

The subject gained its popularity in 1970 and is currently growing in importance. (Halfpenny, 1999)

also tried to explore this concept through an interdisciplinary approach. Due to his social inclination, his

study explores whether a sociological approach complements or contradicts the economic approach

towards the understanding of this field. It accounts for how the different paradigms influence an

individual‘s behavior. By giving the economic analysis a macroeconomic perspective and the

sociological analysis a societal perspective, he tends to draw parallel among the two and concludes that

overall social outcome depends on the system of interdependencies of the individual actors.

Following the overall framework, the paper emphasizes on the giving behavior of the individuals, both

observed and the predicted behavior. Identifying the dominance of the economic approaches and

motivations along with the analysis of psychological theory of scope insensitivity provides for the basis

of this study.

2. Theoretical Framework

The previous researches and studies notice that the most common motivator for giving is altruism

(Andreoni, 1990) and social pressure (Akerlof & Kranton, 2000). In Altruistic approach, the donors are

concerned with what the recipient receives irrespective of the source thus considering it as a public

good. Another important approach put forward by (Andreoni, 1989) is the warm glow approach. It has

also been noticed that individuals gain utility from the act of giving, although their contributions may be

entirely anonymous. The utility is the positive emotional feeling that an individual gains from the act of

giving, thus considering it as a private good. However, other studies suggest that there are several other

factors other than altruism and warm glow and they are not the primary motivations for observed

behavioral differences among individuals.

Accompanying altruism, social pressure is another major factor and acts as another common motivation

when people give to others. Studies of (DellaVigna, List and Malmendier, 2012) show that social

pressure plays an important role in fundraising for charity. For instance individuals might give more

when they are solicited by friends as they might share similar beliefs. Individuals here might give despite

not liking to give to charity because solicitor might have placed them under social pressure thereby

pressurizing to give. This kind of giving might be utility reducer for the giver and is usually demand

driven thereby affecting personal solicitation. Several economists have tried various ways to analyze

this behavior. One of the most common games that most economists apply is the dictator game of

experimental economics. It was first developed by Daniel Kahneman which puts forward evidence

against the rationality of self-interested economic individuals.

3. Review of Literature

This section gives an overview about the studies pertaining to disparate factors influencing behavior of

the individuals towards charitable giving thereby also focusing on factors affecting the philanthropic

market. The review lays its emphasis on several themes giving an economic, social and psychological

perspective to the charitable behavior of individuals.




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3.1 Price and income effect on giving

Economists consider the practice of charity similar to purchase of any other commodity, which hence

depends on the price of giving i.e how costly is it to give. Price of an object simply refers to what we pay

in order to purchase a commodity to gain utility in return. Thus individuals with higher income due to

lower marginal utility of money tend to contribute more towards charity. Since amount of charity is

deductible for those who itemize, the amount of charity also depends on the individual tax rate

(Vesterlund, n.d).Thus tax rates sometimes act as a motivation to giving as those in the higher tax

brackets often receive higher exemptions. Study reveals that among the significant factors, awareness

of tax advantages is one of the most important motivator or incentive for charitable behavior which gets

influenced by the changing tax rates (Prince and File, 1994). When the tax rate influences the price of

the charitable donation, giving one dollar actually costs less than 1 dollar when the marginal tax rate is

high. The exemption pushes up giving significantly and thus acts as an effective tool to increase

contribution and thus social well being.

3.2 Gender

Gender as well plays a major role in influencing the behavior for charity. Many previous studies have

explored the gender effect with contradictory results. The growing body of research literature witnesses

an increasing role of women as donors. The CAF/NCVO UK giving reports (CAF/NCVO 2006) reveal UK

indices that in the year 2005-06 the women percentage was 61% whereas the 53% of men gave each

month. In the experiments performed by Eckel and Grossman (1998), women tend to be more generous

than men; i.e women donate twice as much as men on an average. However the experiments performed

by Bolton and Katok (1995) show contradictory results. On testing through a dictator game, it concluded

that men and women have similar influence in making their choices. As per the similar reports, the mean

amount of money given by women was 25$ whereas that of men was 29$. Here, household decision

making plays an important role in the context of giving which can be categorized into single households

or married households.

Wiepking et al. (2005) identifies that traditional norms increasingly influence the decision making

behavior of the households. In married households with more traditional values the decision making

lies with the men rather than women. Andreoni et al (2001) recommends that men react all the more

firmly to the price of giving (with men being more altruistic when giving is less expensive), though Meier

(2005) contradicts they don't. This inquiry turns out to be especially critical in the connection of tax

incentives for giving, (for example, Gift Aid in the UK) and in investigations of the impact of salary on

giving. The discoveries introduced in Bolton et al. (1994) depend on a dictator game which tries

recommending that there are actually no gender differences in generosity. Giving an account of another

dictator game examination, Ben-Ner et al. (2003) proposes that women are less generous when giving

to other women and that they might give less overall.

3.3 Characteristics of the Individual Recipients

The spatial, time and psychological distance among social groups are also the major characteristics of

individual recipients described through social distance‘. If the social distance decreases, the other

individual does not seems to be an anonymous stranger rather an identified individual. With a higher




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degree of social kinship people tend to respond more favorably. Bohnet and Frey in (1998), reflect that

the identification of the recipients is important in charities which also influences the other related

behaviors. The idea of fairness gets motivated more when the other individual is less anonymous. The

communication with the donors strongly motivates the intrinsic altruistic behavior and thus alters the

decision making behavior of the donors. Hoffman, McCabe, Shachat, and Smith (1994) have reasoned

that high level of anonymity will expand the social separation.

The age and gender of the beneficiary also influences and is one of the major concerns of the donors.

The donors tend to be more generous towards a woman and child‘s welfare (Micklewright and Schnepf,

2009). Thus we can see much evidence from the previous studies conducted that both the donor and

recipient‘s characteristic influences donors decisions.

3.4 Social Resources

Mass and Wiepking (2009) examine the effect of human and social resources on charitable giving. They

claim that large extended social networks influences generosity as they are often exposed to solicitation

by charitable organizations. Thus the media strongly influences charitable giving. In recent years, social

media not only sends and receive information rather also connects and mobilizes the public. The study

conducted by Saxton and Wang (n.d) substantiates this fact. He claims that the social media has been

successful in reducing the spatial distance among the donors and recipients which in turn influenced

the giving through a social network effect, i.e. the increasing circle ultimately increases charitable

contributions.

Government programmers also looks after the social needs of the society through their finance but the

higher the public expenditure it is noted that lower is the contribution of private donors. As the

individual donors are taxpaying individuals they view government donation as a perfect substitute of

individual donation hence private donation decreases i.e public spending Crowds Out private giving.

The classical model of crowding out, as furnished in Warr (1982), Roberts (1984), and Bergstrom,

Blume, and Varian (1986), is derived from the assumption that economic individuals see their own

contribution as a perfect substitute for money given by the government. However the new model and

‘warm glow’ theory (Andreoni, 1990) contradicts this classical model and presents that the individual

experiences joy by giving and hence self satisfaction thereby providing with a ‘warm glow’ approach.

This crowding out effect provides with a two way scenario. The theoretical framework provided by

Andreoni and Payne (2013) predict that charities receiving grants from governmental institutions as

well as donation from the individuals would reduce fund raising efforts in response to the grant thus

leading to substitution effect. Thus contribution of the government towards public good has a two way

approach. The substitution effect is noticed both from the donor‘s perspective as well as the recipient‘s

perspective.

3.5 Public Recognition

(Becker, 1974) in his theory claims that charitable behavior gets influenced by the desire to get social

acclaim. (Harbaug, 1998) believes that prestige is a strong driving force behind donation giving due to

public recognition of donations. The public recognition is only received when the organization publishes




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a public report on the amount of donation. Through his econometric models and utility function he

predicts that donors have a taste for prestige and a substantial amount of donation is attributed to it.

3.6 Peer Effect

On analyzing the effect of giving by reference groups, such as individuals with similar incomes, Feldstein

and Clotfelter [1976] considered mean of giving by these groups as an explanatory variable for an

individual giving. One contemporary study that thoroughly analyzes peer effects in charitable behavior

using empirical data is Carman [2004]. She identified non-self-selected groups of people who are likely

to know each other and shows that increased average giving within a group of individuals leads to higher

contributions overall.(Meer, 2009) paper also examines that several social motives importantly social

pressure influences the allocation of public goods. His data accounts to reflect the effect personal

solicitation has on the decision and size of the gift.

According to the Kantian Rule, instead of free riding he claims that that every individual contributes to

the socially optimum level and instead of individual‘s contribution decreasing with increase in others,

the rule predicts that individuals contribute to the level independent of others (Vesterlund, 2009).On

contrary, (Sugen, 1984) claims that individuals follow a norm that influence them to contribute

depending of the decision ofothers. His model predicts that the individual‘s contribution rather

increases when other people in the same reference group donate. Hence giving decisions are often

guided by social norms and rules.

Interestingly, another effect has been examined by Andreoni and Scholz (1998).By examining the data

from1885 consumer expenditure survey; they found a positive effect of an increase in donation by

others in the same reference group in the socio economic perspective. That is on the parameters being

age, occupation, education and residence.

3.7 Other Areas of Research

The previous researches have also shown that donations grow increasingly with wealth and education

(Schervish and Havens 2001; Brown and Lankford 1992; Kingma 1989; Schwartz 1970). The study

conducted by Mass and Wiepking (2009) claims that having a higher formal education provides greater

access to large financial resources. Not only the financial situation but also better verbal abilities which

in turn helps in better understanding of the needs of the distant people increases the frequency and

amount of charitable donations. Also awareness and exposure to the need and information of charity

are likely to be higher among those who have higher verbal abilities and among the higher educated (

Bekkers, 2006). Despite these motivators, lower socio economic standing increases the probability of

sect affiliation which generates a strong incentive towards charitable giving. The study by James and

Sharpe (2007) predicts that lower income, less education and racial status thereby leading to fewer

societal opportunities leads to increased likelihood of exclusively religious charitable giving.

Most of the reviewed studies have identified the various behaviors and attributes of the charity donors.

Studies have also identified factors like tax deductions, education, gender and several others as the

motivations behind charitable giving. As an individual is a rational being, private enjoyment from the

act of giving has a significant influence in charitable behaviors. Beside this rationalistic behavior, an

individual is also guided by altruistic behavior, ie, the joy from the recipients‘welfare. But the dominance




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of any one of the approaches that guides the individual towards donation has not been probed in the

previous studies. Absence of media reports behave as a bottleneck to the Indian market for philanthropy

with mere 1000 reports compared to 11,000 media reports in UK. The absence of published reports

leads to substantial amount of lack of data. There are several aspects of charitable giving which is still

not covered or published by the surveys conducted by few organizations. The survey also fails to reflect

the major motivations behind charitable giving like income, education, gender and several others.

India is a secular country with a lot of religious dominance over charity. Majority of the people are

believed to donate money due to their affiliation to religious congregations. However, the absence of

published media reports act as a bottleneck towards understanding the philanthropic scenario of India

which make the motivations of the individuals specially the religious giving unclear. There is also a

dearth of studies regarding the gender differences in terms of charity giving. Analyzing the generosity

of gender and it‘s interrelationship with amount and frequency of giving which is a matter of concern.

The present study tries to fill this gap by analyzing the influence of extrinsic and intrinsic motivators on

charitable giving and ascertain the dominant intrinsic behavior.

4. Operationalization of the Key Constructs

Donation: A donation is a gift typically for charitable purposes and/or to benefit a cause. It may

take various forms including cash, cloth, food and vehicles. It also may consists of emergency,

relief or humanitarian aid items, development aid support and can also relate to medical care

needs i.e blood or organs for transplant. An individual might also contribute or donate in the

form of time through volunteering.

Extrinsic and Intrinsic motivators- Extrinsic motivations refer to those factors which are

determined by extrinsic variables such as age, gender, education and marital status whereas

intrinsic motivations are those determinants which include psychographic or attitudinal based

factors.

Warm glow approach: This approach refers to the personal satisfaction and utility that one

derives from the act of charity. It is the purely internal satisfaction that an individual derives

from giving to a recipient which he benefits from.

Prestige: It refers to the utility that one derives from having the amount of a donation publicly

known.

Altruistic approach: Through this approach, an individual is concerned about the well being of

the recipient and hence involves in charitable giving.

5. Data & Methodology

Data for this exploratory study was obtained with the help of a structured questionnaire. A sample size

of 100 was taken through purposeful random sampling from the charity donors of Bangalore Urban

district. Factor analysis and ordinal regression method have been used to understand the influence of

the factors influencing the charity giving behaviour. Chi square test has been used to identify

relationship among gender, motivation, frequency of giving and planned donations with amount of

giving.




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6. Empirical Results

This section analyzes the inter relationship among different aspects in terms of the external and intrinsic

behaviour and its influence on the charity giving. In this study, factor analysis was used to evaluate factors

influencing charity giving. In order to extract the number of variables, Principal component extraction

method with Varimax rotation has been used

The result of factor analysis to find the factors loaded on the extrinsic and intrinsic factors have been

given in Table 1.

Table 1 : Total Variance Explained

Component

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

Total % of Variance Cumulative %

1 2.871 35.885 35.885 2.871 35.885 35.885 2.102 26.275 26.275

2 1.652 20.647 56.531 1.652 20.647 56.531 1.963 24.532 50.807

3 1.163 14.542 71.073 1.163 14.542 71.073 1.621 20.266 71.073

4 .714 8.922 79.995

5 .483 6.035 86.029

6 .404 5.053 91.082

7 .393 4.914 95.997

8 .320 4.003 100.000

Extraction Method: Principal Component Analysis.

The components are extracted into the final solution by checking the eigen values (variables that exceed

1) and choosing only the components that satisfy the criteria. It is evident from Table 1 that components

1,2 and 3 1satisfies this criteria and account for 71.07 percentage of the variance cumulatively. The

extracted factors were then rotated using Varimax (Varimax with Kaiser Normalization) rotation. These

rotated factors with their variable constituents and factor loadings are given in Table 2.

1 Component 1 – Religious giving, Component 2- Personal gain and Component 3- Altruism




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Table 2 : Rotated Component Matrixa

Motivations Component

1 2 3

1) I want to help a cause which I personally believe

-.111 -.084 .881

2)I would like to help people in need

.114 -.111 .870

3)Supporting religious institutions

.796 .126 .032

4)Supporting religious based charities beyond the maintenance of the organization

.844 .069 -.053

5) Charitable giving is a part of my religious obligation or belief

.766 .235 .009

6) Peer Pressure .223 .706 -.241

7)Tax Benefit -.009 .850 .064

8)Receiving recognition at the events

.307 .804 -.151

Source: Field Survey

The rotated components matrix shows the factor loadings for each variable. It is evident from Table 2

that the variables ‘supporting religious institutions’, ‘supporting religious charities beyond the

maintenance of the organization’ and ‘ charitable giving as a part of religious obligation’ load on

component 1 ( values above 0.7), variables ‘ peer pressure’ ‘tax benefit’ and ‘prestige’ load on component

2. Variables ‘I want to help a cause which I personally believe in’ and ‘ I would like to help people in need’

load on component 3. These components can be clubbed into: Religious Giving ( motivation 3,4 and 5),

Personal Gain ( motivation 6,7 and 8) and Altruism (motivation 1 and 2 ).

Furthermore, to identify the importance of certain major influential factors, the sum of the responses

given by the respondents are analyzed and given in Table 3.




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Table 3 : Summation of individual responses

1 )I want

to help a

cause

which i

personally

believe

2)I

would

like to

help

people

in

need

3)Supporting

religious

institutions

4)Supporting

religious

based

charities

beyond the

maintenance

of the

organization

5)Charitable

giving is a

part of my

religious

obligation or

belief

6)Peer

Pressure

7)Tax

Benefit

8)Receiving

recognition

at the

events

N

Valid 100 100 100 100 100 100 100 100

Missing 0 0 0 0 0 0 0 0

Sum 133.00 135.00 297.00 301.00 322.00 342.00 320.00 348.00


The variable levels were weighted as follows: 1-Very Important, 2-Somewhat important, 3-Not very

important and 4-Not at all important. In Table 4, the sum of the weights for 100 cases is calculated. The

minimum sum reflects the most important motivational factor whereas the highest sum denotes the

least important motivational factor. It can be inferred from Table 4 that the variables ‘I want to help a

cause which I personally believe in’ and ‘I would like to help people in need’, are considered as equally

important motivation to charitable giving. This result is in conformity with the altruism approach which

states that an individual is concerned about the well being of the recipient and hence involves in

charitable giving.




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Frequency of giving and gender

To find the association among Frequency of Giving and Gender, ordinal regression test is applied and

the result is given in Table 4

Table 4: Parameter Estimates

Estimate Std. Error Wald Df Sig.

95% Confidence Interval

Lower Bound

Upper Bound

[frequencyn = 1.00] -2.829 .461 37.685 1 .000 -3.733 -1.926

[frequencyn = 2.00] -1.342 .304 19.523 1 .000 -1.937 -.747

Threshold

[frequencyn = 3.00] .085 .268 .099 1 .752 -.441 .611

[frequencyn = 4.00] 1.250 .301 17.278 1 .000 .661 1.839

Location

[gendern=1] -.150 .358 .175 1 .676 -.851 .552

0a

[gendern=2] . . 0 . . .

Source: Field Survey;

Link function: Logit. a. This parameter is set to zero because it is redundant.

In the above Table 42, under the variable ‘Gender’, ‘males’ are taken to be the reference category. Since

the odds ratio for females is 0.83 (exp -.150) which is less than 1 and also parameter estimate for females

2 Gender 1: Female and Gender 2: Male




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in the table 8 is negative, it can be concluded that females would be less likely to donate as frequently

as compared to males.

Amount of Giving and Gender

The test aims to find out if there is any significant relationship between Gender and Amount of Giving.

Table 5 : Chi-Square Test between Amount of Giving and Gender

Value Df Asymp. Sig. (2-

sided)

Pearson Chi-Square 7.762a 5 .025

Likelihood Ratio 8.999 5 .109

Linear-by-Linear Association 3.715 1 .054

N of Valid Cases 100

a. 6 cells (50.0%) have expected count less than 5.

The minimum expected count is 1.50.

It is evident from Table 5 that there is a signifying relationship among the amount of giving and gender

i.e. between males and females (P is less than 0.05)




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Table 6: Gender * Amount of Giving Cross tabulation

Amount of Giving Total

Less than 5,000 Rs- 15,000 Rs- 25,000 Rs- 35,000 Rs-

More than

5000 Rs 15,000 Rs 25,000 Rs 35,0000 Rs 50,000 Rs 50,000 Rs

Count 20 19 6 2 0 3 50

Female Expected

18.5 15.0 7.5 3.5 1.5 4.0 50.0

Count

Gender

Count 17 11 9 5 3 5 50

Male Expected

18.5 15.0 7.5 3.5 1.5 4.0 50.0

Count

Count 37 30 15 7 3 8 100

Total Expected

37.0 30.0 15.0 7.0 3.0 8.0 100.0

Count


The cross tabulation results given in Table 6 denote the relationship among gender and amount of

giving. It is clear that compared to males females contribute a lesser amount when it comes to donations

to charity giving if the amount is below Rs. 15000 i.e 39 females as compared to 28 males. However, as

the amount of giving increases, males tend to donate more in the higher brackets than females which

implies that more males donate higher amounts than females.




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Frequency of giving and salary

The study also tried to find out whether there is any association between the frequency of giving and

salary3 with the help of ordinal regression and the result is given in Table 7

Table 7: Parameter Estimates

Estimate Std. Error Wald Df Sig.

95% Confidence Interval

Lower Bound

Upper Bound

[frequencyn = 1.00] -2.706 .488 30.760 1 .000 -3.662 -1.750

[frequencyn = 2.00] -1.219 .345 12.448 1 .000 -1.896 -.542

Threshold

[frequencyn = 3.00] .210 .320 .428 1 .513 -.418 .837

[frequencyn = 4.00] 1.379 .352 15.349 1 .000 .689 2.068

[salaryn=1.00] .210 .497 .179 1 .672 -.764 1.184

[salaryn=2.00] -.113 .483 .054 1 .816 -1.059 .834

Location

[salaryn=3.00] .161 .490 .108 1 .742 -.798 1.121

0a

[salaryn=4.00] . . 0 . . .


a. This parameter is set to zero because it is redundant.

3 Salary 1=Upto Rs 2, 50,000; Salary2=Rs 250000-500000 ; Salary3=Rs 500000-1000000; Salary 4=above Rs

10,00,000 [reference category.




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It is evident from table 7 that people in the salary brackets 1 and 3 are more likely to have a higher

frequency of donations. They donate more frequently than the people in the salary bracket 4 (people

whose income is above Rs 10, 00,000). However, it is also to be noted that salary2 is negative. This

further denotes that people in the salary bracket of Rs 2, 50,000- Rs 5, 00,000 are less likely to donate

more frequently than the reference category [salary4].

Frequency of attendance and amount of giving

To establish a relationship between frequency of attendance to religious meetings, functions and

gatherings and amount of giving, a chi square test is applied and the result is given in Table 8.

Table 8: Chi-Square Tests

Value df Asymp. Sig. (2-

sided)

Pearson Chi-Square 32.382a 20 .039

Likelihood Ratio 24.983 20 .202

Linear-by-Linear

1.730 1 .188

Association

N of Valid Cases 100

a. 25 cells (83.3%) have expected count less than 5. The minimum expected

count is .03.

It can be seen from Table 8 that there is a positive relationship between the frequency of attending

religious gathering and the amount of giving. Since the Pearson coefficient sign is poisitve, it can be

inferred that the amount given for donations tends to increase as a person tends to increasingly attend

religious meetings, functions and gatherings.

7. Results and Discussion

Factor analysis and Bartlett's Test results shows that individuals were motivated to donate to the causes

which they personally believed in and because they wanted to help people who were in need (Sums




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were 133 and 135 respectively)4. Although religion based factors did have an impact on the decision

making, they can be considered as secondary motivators rather than the primary. Chi square results

show that amount of donation increases with an increase in the frequency of attendance of religious

meetings or events. It was also observed that people, who donated often, donated more. Analysis of

gender and amount of giving through ordinal regression and chi square test showed that males donated

more than females, implying that gender has a significant effect on the charitable giving.

Results of analysis of salary with other factors such as motivations for giving and frequency of giving

through the aforementioned tests, results of other tests and other observed data such as preferred

avenue of donation, preferred method of donation etc. when viewed as a whole, lead us to believe that

pure altruism is very rare in modern day society. Extrinsic factors such as education, income, social

status etc. have led to the crowding out of intrinsic factors eventually resulting in the decline of altruism

as primary motivator.

8. Conclusion

The present study has made an attempt to determine the dominant intrinsic factor, i.e, the approach out

of three base approaches which leads to charitable giving and the effect of social, economic and

psychological factors which acts as extrinsic factors in influencing the charity giving behavior. Although

not much can be inferred on the dominance of giving for social status as a motivator as it would require

intricately crafted psychological tests and analysis. Results of empirical analysis show that out of the

three basic approaches for giving, i.e, altruism, warm glow or giving for social status or prestige, warm

glow is the most dominant one. Even though warm glow may be the primary motivator, altruism and

giving for social status are present as secondary and even in some cases as additional motives which

together with the primary factors help in shaping up the charitable behavior of an individual and hence

importance of the their effect cannot be overlooked.

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