Is Charitable Giving a Beauty Contest?

By Prof. Syon Bhanot (Swarthmore College) & Tony Trinh     (Swarthmore College, Class of 2017)

It’s hard to overstate just how different our society has become since the introduction of the internet. Even charitable giving has been forever altered. It used to be done almost exclusively through cash gifts sent by phone or mail to large, faceless non-profit organizations. While these organizations remain major players, platforms like Kickstarter, Indiegogo, Kiva, JustGive, GiveDirectly, and CrowdRise have provided outlets for donors who wish to choose precisely who they want to give to - be it a beauty salon owner in Nicaragua or a farmer in a mountainous area in Vietnam.

In a sense, this is a great thing. People now have the power to support projects that resonate with them. However, it also opens up the possibility for biases to creep into charitable decisions - magnetically pulling money to “sexy” projects, rather than those that are most important or impactful.

A new research paper by Christina Jenq, Jessica Pan, and Walter Theseira in the Journal of Economic Behavior and Organization, titled “Beauty, Weight, and Skin Color in Charitable Giving,” explores the question of bias in charitable giving. The paper uses data from Kiva, a popular online peer-to-peer microfinance and lending website. On this website, needy borrowers upload pictures of themselves and a write few short paragraphs indicating what they need money for. Based on these profiles, charitable lenders decide who they want to fund.

The paper suggests that empowering charitable lenders to pick and choose projects to support may indeed have some downsides. Specifically, the authors find strong evidence that borrowers’ physical characteristics heavily influence their chances of receiving lender support. In particular, donors appear to strongly favor recipients who are more attractive, less overweight, and lighter in skin color. The authors conclude that a one-standard-deviation increase in assessed attractiveness is associated with an 11% reduction in the time needed to obtain full funding. Meanwhile, a one-standard-deviation increase in assessed obesity is associated with an increase in time until full funding of about 12%.

Put simply: thin, good-looking borrowers with light skin are able to obtain loans more quickly than their heavier, less attractive, and darker-skinned counterparts.

 

This figure shows the effect of a one-standard-deviation increase in various borrower characteristics on the time it took their Kiva projects to obtain full funding. It shows that thinner, better-looking, and lighter-skinned individuals tend to acquire funding faster.

This figure shows the effect of a one-standard-deviation increase in various borrower characteristics on the time it took their Kiva projects to obtain full funding. It shows that thinner, better-looking, and lighter-skinned individuals tend to acquire funding faster.


What to make of this result? If donors were simply seeking to maximize social impact, they would seek to fund the more worthy projects. One may ask, then: are the specific traits the authors explore indicative of creditworthiness? Perhaps it is simply the case that more attractive, thinner, and lighter-skinned individuals have better projects posted on Kiva. The authors tackle this question, but find no real support for this possibility. This suggests that donors are lending to those with certain physical traits not because they believe these recipients have the best projects, but merely because of their appearance.

Why might this be happening? Well, choosing who to give to on online platforms like Kiva, which itself has a database of 1.7 million borrowers around the world, is a daunting task. Donors can drive themselves crazy surfing through the dizzying array of choices. One (conscious or unconscious) mental response, as the authors suggest, would be to simplify the decision-making process by relying on simple stereotypes. For example: attractive, thin, light-skinned people are more competent than others.    

This is not the only such result in the social sciences. For example, in “Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment,” John List and his colleagues found that attractive female solicitors received more donations, and bigger donations, than their peers. Meanwhile, a classic psychology study from the 1970’s by Donald Dutton and Arthur Aron showed that people experiencing strong affective responses easily misattribute the source of arousal. Applied to the case of Kiva, donors may be having an unconscious reaction to the borrower’s photo, but confuse their excitement about the individual depicted with passion for the borrower’s project.

What are we to make of these studies? Well, one logical conclusion is that those who seek to collect charitable donations should use social perceptions of attractiveness (damaging as they may be) to inform the way they solicit donations. But we think the recommendation to use mass “sex appeal” to generate donations masks a more serious concern arising from this research. A lot of the world’s problems are not sexy. The potential for climate change is not sexy. Starvation, disease, inequality, and injustice are not postcard material. How, then, should those who care deeply about these problems reach the masses and encourage them to care, without resorting to techniques derived from distasteful stereotypes? If we had an answer to that…well, that would be pretty sexy.