Bill Harbaugh

Money, Generosity and Happiness

In an engaging and interactive dialogue, Elizabeth Dunn joined Bill Harbaugh and John Helliwell at SFU Harbour Centre for “Money, Generosity and Happiness” where the running theme was that while we may very often believe that we can “buy” happiness we’re better off “investing” in the well-being of others.

Harbaugh attempted to explain why many of us are generous, claiming that selfish modes of generosity might be more common and useful than altruistic ones.

“The problem with pure altruism (the idea that we give with no selfish motive) is that it is diluted so quickly,” said Harbaugh.

Pure altruism, he argues, is diluted by the number of people who benefit from our generosity. For example, if one gives money to a low-income individual, he or she benefits by seeing the level of well-being in the other person increase. However, many other people, who gave nothing, also get to see the level of well-being in that low-income individual person increase. This “free ride”, Harbaugh argues makes pure altruistic giving very inefficient in terms of happiness to the giver.

However, as Harbaugh pointed out, 68% of Americans give to some charitable cause, with the average person giving over 2% of their income. So why are these people still giving?

Harbaugh argues that a more efficient type of generosity is what he calls “warm glow” giving. In this model people give because they get a sense of satisfaction from personally improving the well-being of others.

While he points out that this form of giving is inherently selfish, Harbaugh’s research suggests it is much more effective in producing charitable giving when compared to purely altruistic giving.

Watch the trailer and check out the full audio podcast in the Event link below.