Can You Buy Happiness? (Spoiler Alert: Yes. But Not How You’d Think.)
If you found a $20 bill lying on the sidewalk, what would you do? Maybe look around and see if anyone else had dropped it, right? And if no one appeared, it would probably make sense to put it in your pocket. No sense in wasting a free gift from the universe!
But then what?
It might be your first instinct to spend that money on yourself — phone bills don’t pay for themselves, after all, and neither do delicious lattes. However, research shows that you’ll actually earn a higher dividend, both financial and emotional, from spending it on someone else.
Turns out that giving to others seriously enriches our lives. You’ve probably figured that out already, but research shows that the benefits of giving goes far beyond simple warm fuzzies—and you don’t have to be a Rockefeller to access them.
So, what kind of benefits are we talking about here? We’ll lay it out for you.
#1: Giving actually results in making more money.
We know, it’s counterintuitive. But Arthur Brooks, economist and president of the American Enterprise Institute, performed a statistical evaluation of data on the giving and earning habits of 30,000 Americans, expecting to prove that you had to make money in order to give it away. Instead, he discovered the opposite: “If you have two families that are exactly identical — in other words, same religion, same race, same number of kids, same town, same level of education, and everything’s the same — except that one family gives a hundred dollars more to charity than the second family, then the giving family will earn on average $375 more in income than the nongiving family — and that’s statistically attributable to the gift.” In other words, when people give, they tend to earn it back.
#2: Spending money on others makes us happier than spending it on ourselves, even if it’s not a huge gift.
In his TEDxCambridge talk, social science researcher Michael Norton shares research about what happens when people are given money to spend on themselves, vs. when they’re given money and directed to spend it on others. His study showed that spending money on ourselves doesn’t really change much, but spending it on others pumps up our happiness — regardless of how much you spent, whether you made a big or small impact, and even whether you knew the recipients of your generosity.
#3: The stated intention of generosity actually makes us more likely to give.
As it turns out, research from the University of Zurich shows that even saying we’re going to give money away changes our brains in ways that make us happier. We don’t even have to do anything! Subjects reported feeling happier after deciding to give money away, and the fMRI results indicated that their brains lit up in two key places — not just the part that reflects altruism, but also the brain’s reward center.
Lead researcher Thomas Kahnt points out that this makes sense from an evolutionary perspective: early humans might not have been super jazzed about sharing their limited resources without an added bonus like an emotional payoff. Even though his experiment was simulated, he says, “it does show a mechanistic linkage in the brain between doing something nice for someone and feeling better about yourself.”
So, what does that mean for planned giving?
Short answer: We don’t know! But we’re planning to find out. ;)
So far, despite a good amount of research on the benefits of generosity, there’s little out there to tell us what happens to our brains and emotions when we pledge to give at a point far into the future. But in 2019, Giving Docs is teaming up with the Startup Lab at the Center for Advanced Hindsight at Duke University — you may remember that we joined their accelerator in 2017 and learned a ton about behavioral economics — to change that. Stay tuned for updates on our work together! We’re hoping to generate and share some serious data that will shape the field of planned giving — and provide even more great reasons to give.
At Giving Docs, we specialize in planned giving campaigns that help organizations engage with their donor base in new and creative ways (when we’re not running super-cool studies with Dan Ariely). Learn more about what we do, and schedule a free consultation, here.
