BEHAVIOURAL PHILANTHROPY: Harnessing behavioural sciences to design more effective tax incentives for philanthropy

Abstract

We introduce behavioural philanthropy, a novel interdisciplinary approach examining philanthropic decisions from the perspective of individual decision-makers. Such an approach is relevant to policymakers and law researchers who design tax-based incentives to stimulate private engagement in philanthropy. Behavioural philanthropy relies on insights from psychology, economics, and law to understand the motives that drive individuals, unveil patterns in behaviour, and identify the key forces that shape decisions in the context of philanthropy. In the first section, we highlight the relevance of individual contributions to philanthropy. Following this, we review and discuss extant research that underlies the motivations of individuals engaging in philanthropic behaviours, analyses some weaknesses of the existing approaches, and highlights the benefits of producing data in controlled environments, such as in laboratory settings. We believe that integrating the benefits of these approaches into behavioural philanthropy will: 1) promote the understanding of the psychological and affective mechanisms supporting philanthropic decision making, 2) help build new sound theories that rely on precise computational models and allow for a mechanistic understanding of the complex behaviours in philanthropy, and 3) provide implications for behaviourally informed policy that could help design efficient tax schemes to generate the most impactful giving and welfare systems across the globe.