Philanthropy through Nudge or Push?


Magazine article

Since 2009, the beginning of the economic recession and subsequent Government spending cuts, we have seen a multitude of initiatives to encourage increased giving from the private sector to fill the gap as a result of reduced Government funding especially in the arts and cultural sectors.

The Government is keen to nudge society in its support of the cultural sector.  For whatever reason, it has chosen not to push but to gently encourage a change in behaviour.  But is nudging enough?  Would charities be better served if the Government developed initiatives and policies that pushed charitable giving?

Nudging is subtle, we adopt new behaviours without realising that we are gently being manoeuvred into doing the “right thing”. On the other hand pushing forces us to change, laws are made, taxes introduced to enforce change.  When the Government pushes it is accused of being paternalistic.  However nudging can be viewed as Libertarian Paternalism - we continue to have freedom of choice.

In 2008 Richard Thaler and Cass Sunstein published their book Nudge.  They define the goal of nudge as “… show how choice architecture can be used to help nudge people to make better choices (as judged by themselves) without forcing certain outcomes upon anyone….”

The Nudge theory has been adopted by the Government as a means to change a range of behaviours from healthy eating initiatives and anti-smoking campaigns to taking personal responsibility for pension investment for example.  The Cabinet Office Behaviour Insights Team, often referred to as the Nudge Unit, works across all government departments as well as NGOs, charities and private sector partners.  In May this year they published their report:  “Applying behavioural insights to charitable giving” (Crown publications).  The paper explored how four behavioural insights might be used to support charitable giving: 

1.      Make it Easy

2.      Attract Attention

3.      Focus on the Social

4.      Timing Matters

Five behaviour trials were undertaken using the above four insights.  When used appropriately, the insights did indeed increase charitable giving.

Subtle nudge interventions work, they are effective and they enable us to change our behaviours without too much effort.  In December 2010 Jeremy Hunt (the then Secretary of State for DCMS), launched his ten point plan to facilitate cultural institutions becoming stronger and more financially resilient in the long term.  Since his announcement we have seen the following Government backed initiatives launched:

  • Legacy 10
  • Living Legacy
  • Catalyst Fund
  • National Funding Scheme
  • Tax incentives to boost Legacy giving
  • Philanthropy beyond London report
  • Digital Giving in the Arts report


Just who are all these initiatives aimed at?  Who is being encouraged to give?  How are individuals and corporations being nudged to increase their philanthropy?  How visible are associated marketing campaigns?  There is plenty of formal and informal publicity around the dangers of smoking – take for example the Government’s recent decision to enforce plain packaging (though admittedly they did perform an astonishing U- turn), and there is the guilt inducing TV adverts on eating healthily and exercising and the seemingly perpetual (this though could be a personal perception due to my age) warning messages that few of us have saved enough of our salaries to enjoy a decent retirement.  Outside of the specialist fundraising media, where are the messages aimed at the public to increase their donations and take responsibility for ensuring that charities, the arts and the cultural sector have the funds needed to continue to play a vital role in society?

It seems to me that that the cultural sector itself is being nudged to improve charitable giving, however, the nudge for the donors is so subtle it is hardly felt.  And the fact that so many art and cultural organisations are either closing or reducing their outputs, suggests the financial gap is not being filled by philanthropy.

One thing is very clear:  philanthropy is an essential part of our economy.  Without it we would be a socially and culturally bereft country.  What is less clear is how we should encourage all sectors of society to give. 

Philanthropy has to become the social norm and in order for it do so, we need a mix of incentives to encourage giving by all sectors of society and across all regions.  What we currently have in place are platforms that push the responsibility for philanthropy towards the charitable organisation.

John Nickson (author of Giving is Good for you:  Why Britain should be Bothered to Give More) wrote in the FT recently that “….every donor I consulted agrees that philanthropy should be taken out of politics and that we need a long term strategy to develop charitable giving backed by the main political parties.”  He argues that it is through the tax and honours systems that Government should encourage philanthropy.

It would be fair to say everybody knows giving to charities is a good thing to do.  However, it has not yet become the norm to give.  And it won’t become the norm unless society is pushed to do so through tax incentives, rewards via the honours system and visible, explicit campaigns that promote the good giving does – not just to specific causes and appeals but across the board.

It would seem a lot more needs to be done for philanthropy to become the social norm.  Clumsy, diverse and unfocussed Government initiatives will not work.  The Government ought to look to its Cabinet Office Nudge Unit and its paper on behaviour in charitable giving.   Pushing responsibility to the charitable organisation to increase philanthropy does not address any of the behaviour insights discussed in the paper (Make it Easy, Attract Attention, Focus on the Social, Timing Matters).  Meaningful tax incentives (push) and initiatives that nudge the public into seeing charitable giving as a social norm and default position will. 

This article is tagged under:

  • Government, legal and tax issues
  • Promoting philanthropy