Suppose you run a big company like Microsoft. You want to donate some money to charity but you don’t especially care where it goes. Your primary goal isn’t to do the most good. It’s to do some good while maximizing prestige and minimizing criticism of your decisions.
A pragmatic strategy is to offer to match the donations of your employees. This has several benefits.
It’s a morale boost for your employees. If an employee loves <charity x> then the employee gets extra money for <charity x>. Lots of employees casually mention to their friends about how you supported their pet charity. You were going to spend the money on something anyway so it costs nothing to you. Compensating your employees at no (marginal) cost to you is a benefit to the business as a whole. It especially incentivizes altruistic people to work for you, which improves the quality of your workforce.
You end up spending money on a variety of little things. This is good for the community you operate out of. Some positive externalities feed back into your company. Instead of having to earmark every individual <community project x> (which creates tons of bureaucratic friction) you indirectly fund it with matching donations.
You have insulation from all individual decisions. If somebody throws money at a charity that does something unethical you don’t take heat for it the way you would if you specifically authorized a giant lump of money for that specific charity. Instead of dealing with the political fallout, you get to focus on your real job of maintaining the Windows Operating System monopoly. Which brings is to perhaps the most important reason…
Matching donations costs zero managerial overhead. Money is cheap to a large organization like Microsoft. High-level decision-making ability is scarce.
Thank you! I hadn’t considered amoral actors offloading their decision making to others for whatever benefits might accrue to them from conspicuous altruism, but this makes perfect sense.
Suppose you run a big company like Microsoft. You want to donate some money to charity but you don’t especially care where it goes. Your primary goal isn’t to do the most good. It’s to do some good while maximizing prestige and minimizing criticism of your decisions.
A pragmatic strategy is to offer to match the donations of your employees. This has several benefits.
It’s a morale boost for your employees. If an employee loves <charity x> then the employee gets extra money for <charity x>. Lots of employees casually mention to their friends about how you supported their pet charity. You were going to spend the money on something anyway so it costs nothing to you. Compensating your employees at no (marginal) cost to you is a benefit to the business as a whole. It especially incentivizes altruistic people to work for you, which improves the quality of your workforce.
You end up spending money on a variety of little things. This is good for the community you operate out of. Some positive externalities feed back into your company. Instead of having to earmark every individual <community project x> (which creates tons of bureaucratic friction) you indirectly fund it with matching donations.
You have insulation from all individual decisions. If somebody throws money at a charity that does something unethical you don’t take heat for it the way you would if you specifically authorized a giant lump of money for that specific charity. Instead of dealing with the political fallout, you get to focus on your real job of maintaining the Windows Operating System monopoly. Which brings is to perhaps the most important reason…
Matching donations costs zero managerial overhead. Money is cheap to a large organization like Microsoft. High-level decision-making ability is scarce.
Thank you! I hadn’t considered amoral actors offloading their decision making to others for whatever benefits might accrue to them from conspicuous altruism, but this makes perfect sense.
This is a good explanation of why employer donation matching makes sense, but that’s pretty different from the case we’re discussing here?