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Charities Aid Foundation's Giving Thought podcast explored the big issues, themes and news stories relating to philanthropy and the work of civil society. 

This podcast is no longer produced.


Nov 21, 2017

In episode 14, Rhod and Adam take a look at the field of behavioural economics and how it affects philanthropy. Topics covered include:


  • Classical Economics and charity: classical economics assumes we are all rational and self-interested, so it cannot explain behaviour that is apparently irrational and purely altruistic. Hence new explanatory mechanisms have arisen- in particular the “warm glow” theory which posits that all altruism is in fact “impure” because donors actually get a benefit from their giving. Subsequent neurological experiments have also backed this idea up. So what does this mean for efforts to encourage philanthropy?


  • Nudge, Nudge, Wink, Wink: Richard Thaler recently received the Nobel Prize for Economics for his work on so-called “nudge theory”. This proposes that small changes in the way information is presented or choices offered can have a significant effect on outcomes at a macro level. Can we harness this insight to drive more charitable giving? What kind of nudges could we use?


  • Fast & Slow Thinking: Another economist Daniel Kahneman, won the Nobel Prize for his theory of “System 1 and System 2 thinking” which distinguishes between the roles that deliberative (“slow”) thought and less-deliberative thought based on heuristics (“fast thought”) play in our decision making. What lessons could this offer for philanthropy? Are there tensions between the desire to make giving more strategic and evidence that appealing to “fast thinking” may be more effective in eliciting donations?



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