University of Bristol Schoolscharitychallenge

The University of Bristol’s Festival of Social

Sciences and Law presents:

SCHOOLS CHARITY

CHALLENGE 2013

8 November 2013

Tweet @UobFutures #TF2013

Introduction

Sarah Smith

(University of Bristol)

The challenge

• How to encourage (more) people to give to charity in the workplace

• Using insights from behavioural economics

• Drawing on experience of recent “giving trials”

What you will get from this

• Insights into

–behavioural economics

– applied economic research

• A “warm glow” from thinking about charity

Homo economicus

• Independent

• Rational

• Utility-maximising

Good 1

Good 2

U x1

x2

Other goods

Donation to charity

U x1

x2

How to get homo economicus to give more?

Other goods

Donation to charity

U x1

x2

Make it cheaper for people to give Offer a match Or a (tax) rebate


Other goods

Donation to charity

U x1

x2

U’ x1’

x2’

Make it cheaper for people to give Offer a match Or a (tax) rebate


Payroll giving schemes

• Allow people to give out of their gross (before tax) earnings – which means giving up less of the other things they want to buy

• Many firms offer a match on top of this

• But take up is low: <1% at the majority of firms with payroll giving schemes

Behavioural Economics Insights

• Does not do away altogether with homo economicus paradigm

• But makes different/ more realistic assumptions about the way people make decisions

Behavioural Economics Insights (1)

• Making rational decisions is a costly activity

• People may not always have – and/ or process – all the relevant information

• Small processing/ transactions costs have a big effect


• Practical insights:

– The way options are presented matters

– Simplifying choices can have an effect on decisions

–Defaults (opt in/out)


• People are social

– They care what other people think

– They are influenced by what other people do


• Practical insights

– People respond to information on what other people have done

– Personal relationships matter

– Group dynamics are important

Charitable Giving Experiments

Michael Sanders

(University of Bristol

And Behavioural Insights Team)

Experiments – why?

• If we observe the world around us, we can learn a lot

• However, without a source of random variation, we can’t tell if one thing causes another.

• Random allocation – we expect two groups to be the same.

Charitable Giving Experiments

• Two experiments

• Carried out in two very different workplaces

• Very quick examples of what can be done

Experiment 1

• Inflation erodes the value of donations

• Charities Trust offers a solution – 3% annual increases, to keep the value of your giving

• Take-up quite low

Experiment 1

• Switch the default –

• Tick to opt in

• Tick to opt out

• Very simple intervention, which can be very powerful

Experiment 1: Results

6%

48%

0%

20%

40%

60%

Opt-in Opt-out

Enrollment into annual increases

Experiment 2

• Investment bank

• Asking people to give one day’s salary

• 63 Offices

Volunteers

Fliers

Sweets

Experiment 2: Results

5% 5%

11%

0%

20%

Control Group Fliers Sweets

Giving One Day’s Salary



SCHOOLS CHARITY

CHALLENGE 2013

8 November 2013


The importance of giving in the workplace

Why choose payroll giving?

• Tax efficient

• Payroll giving is the most tax effective way for employees to support charities and good causes

• Social and community engagement

• Giving in the workplace delivers the feel good factor

• Flexible

• Complete choice over the charities they donate to and the amount

Engaging employees in workplace giving

• What works?

• Chocolate!

• Match funding

• The last 3 feet…

• What doesn’t work?

• Poor promotion/communication = lack of awareness

• A complicated/time consuming sign-up process



SCHOOLS CHARITY

CHALLENGE 2013

8 November 2013


Now over to you

• Design an intervention to increase the level of giving in the workplace

• Prepare a brief (5 mins presentation)

• Your idea will be judged on:

– Innovation

– Potential to increase giving

– Incorporation of behavioural economics insights

The context

• Retail company; 600 stores across the country

• 11,000 employees; 212 signed up to payroll giving

• Presentations at HQ (no visits to outlets)

• Company matches first month’s donation

• Company supports Unicef; employees can choose

which charity to give to



SCHOOLS CHARITY

CHALLENGE 2013

8 November 2013


University of Bristol Schoolscharitychallenge

Economy & Finance

Transcript of University of Bristol Schoolscharitychallenge