Monday, December 22, 2008

The warm glow of Christmas and giving to charities 

A quick timeout from grading -- one stack left, will take about 24 hours to finish -- to ponder a question. I won't identify who's who in this because the parties may read this blog, but anyway...

A woman sends a holiday card to a close female friend and includes in it a note. The note says that money is donated by the sender in the receiver's name to a charity in lieu of a gift for that holiday. The receiver does not particularly like this charity and is miffed. The two normally exchange gifts directly; there was no agreement beforehand on the use of this "indirect gifting". (I'm not sure that is the term of art here, but I'll use it throughout.)

Now there's the famous paper of the Deadweight Loss of Christmas, written fifteen years ago by Waldfogel. Tim Harford noted this weekend that the point of Waldfogel isn't to say gift-giving is wasteful or pointless but simply to identify sentimentality as a significant determinant in gift-giving. But sentimentality doesn't necessarily rise with expenditure, so "the wise gift-giver," Harford says, "will choose something inexpensive that expresses affection."

So how do we pick the charity that we contribute to on behalf of another? A friend or his spouse passes away, and the obituary announces where to send memorials rather than flowers. Very handy, but hardly useful here. Maybe our blogs, Facebook pages, etc., should all carry announcements telling our 'friends' "if you want to give to charity in lieu of sending me a gift, here are the ones I support." I guess that is unseemly or mercenary, so few will do it. But I don't think it's a terrible idea. After all, my friend wasn't upset that her friend sent to a charity: The charity her friend chose was the issue.

The point is that, much like with direct gifts, the point of an indirect gift should be that you demonstrate your knowledge of the receiver by the choice. This is why most men tremble in fear in buying gifts for their wives, and why I love Mrs S for her direction: She likes perfume, and it is always appreciated. (Yes, used to be perfume and jewelry last time I wrote about this, but she's off the latter.) My job is to walk to a counter and purchase something that I think will smell good on her and which is like what she wears. Something different but not too. (It's OK that she reads this, as this is what she expects of me.)

Now I can imagine a friend contributing to a charity the receiver doesn't know because the friend has some knowledge about a charity the receiver has not heard of. But giving to a charity without some knowledge that "my friend would give to this place, if she knew about it" is pretty dangerous stuff.

There's a tradeoff, of course. I have liberal friends who give to liberal charities. I am unlikely to join them in giving to them. If we don't share a value on charities to whom I could contribute on their behalf, I probably wouldn't do so. But then, why would be friends?

I guess I'm better off buying them a gift card somewhere. They can give the card to charity if they prefer.

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