The Directory of Social Change and Charities Aid Foundation have both expressed scepticism for the power of ‘nudge theory’ or behavioural economics to make a big difference to UK giving levels, as emphasised by the government in the Giving Green Paper.
Both organisations suggest that the government has focused too much on the theory, which supposes that people can be persuaded to give more via numerous small changes suggested and manufactured by others and by developing social norms.
CAF instead called for a vast number of reforms, many of which echoed those included in other groups' submissions. Like New Philanthropy Capital, CAF suggested that government should support the introduction of a ‘Giving Pledge’ in the UK to encourage high net worth individuals to give large sums of their wealth, but went further and suggested that ministers sign up to a similar - if lower level - pledge.
In the same vein as the FRSB and Institute of Fundraising responses, CAF also claimed the green paper had put too much faith in the power of new technology to unleash new giving, and said of social networking in particular, that the government is in “danger of overstating the potential” of their as-yet unproven fundraising abilities.
The absence of tax incentives in the green paper was highlighted yet again and CAF joined others, including Iain Moore Associates and NPC, in calling for the introduction of lifetime legacies. The organisation said that government should work with high street banks to encourage them to introduce charitable giving accounts.
DSC meanwhile dissected the elements involved in nudge theory, and said that government should be realistic about the potential for such nudges to shift the needle on giving. It warned in particular that government should not be the ‘nudger’, but that these pushes should come from charities.
Both the DSC and CAF objected to the green paper proposal to force trusts and foundations to pay out a minimum 5 per cent of their assets in grants each year. DSC’s head of policy Jay Kennedy told Civil Society: "A 5 per cent payout rule based on the asset value could mean trusts might have to dispose of assets that are serving charitable objectives in other ways, just to meet the requirement."
CAF and DSC sceptical of government faith in 'nudge' theory
11 Mar 2011
News
The Directory of Social Change and Charities Aid Foundation have both expressed scepticism for the power of ‘nudge theory’ or behavioural economics to make a big difference to UK giving levels, as emphasised by the government in the Giving Green Paper.