The Economics of Gifts and Giving
Giving to Charity: Altruism and Incentives
People give to charity out of concern for others, warm glow and social pressure, and tax deductions encourage donations.
Gifts to strangers.
Motives
Empathy, moral values and the personal satisfaction of giving.
Incentives
Tax deductions under Section 80G and matching donations raise giving.
Effective giving
Choosing charities with proven impact can multiply benefits.
CSR
Indian companies above a size must spend 2 per cent of profits on corporate social responsibility.
A matched gift
An employer doubles staff donations to a charity.
Assuming all giving has equal impact
Effectiveness varies.
Key takeaways
- Charity has mixed motives.
- Tax deductions encourage giving.
- Effectiveness varies.
- CSR is mandatory for large firms.
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