What about those who treat matching donations as an applause light, and simply do it because it is ingroup behaviour and not because they’ve followed the argument?
Isn’t the whole concept of matching donations a bit irrational to begin with? If a company thinks that MIRI is a good cause, they should give money to MIRI. If they think that potential employees will be motivated by them giving money to MIRI, wouldn’t a naive application of economics predict that employees would value a salary increase of a particular amount at a utility that is equal or greater than the utility of that particular amount being donated to MIRI? An employee can convert a $1000 salary increase to a $1000 MIRI donation, but not the reverse. Either the company is being irrational, or it is expecting its employees to be irrational.
In some jurisdictions it may be cheaper for the company to donate a given amount to charity than to pay it to an employee (because of tax rules intended to incentivize charitable donations).
The company may value both employee-motivation and helping charities.
The company may value being seen as the sort of company that helps charities.
This seems like a correct answer. The company (1) wants to be seen as the sort of company that helps charities, (2) doesn’t care deeply about the charities, and (3) wants to motivate employees.
The first part explains why they have a budget for charities, and the second and third part together explain why they let employees allocate that budget instead of the company doing it itself. The charitable explanation of the second part is that the company trusts their employees to have good knowledge about charities, and thus kinda outsources the research of good charities to them.
On the other hand, an uncharitable explanation is that if most employees don’t donate to charities, then this strategy allows the company to appear more generous than it actually is. For example, if a company with 1000 employees publicly declares to match each employee’s donations up to $1000, it gives an impression as if they are going to donate $1000000 to charities, while in fact they may know that only five of their employees actually donate to charities, so the expected expense is $5000. (There is a risk this could backfire, but maybe they did experiments with smaller sums in the previous years, and/or maybe there is a small print somewhere making an exception in the case that too many employees decide to donate.)
Isn’t the whole concept of matching donations a bit irrational to begin with?
There no reason to call a practice irrational simply because you don’t understand it and it’s not explained by naive application of classical economics.
It seems to be good for branding. We know that spending money for others makes people happier. Employees who donate are happier than those who don’t. That’s valuable to the company.
An employee can convert a $1000 increase into a $1000 MIRI donation, but that requires the employee to get up and do something (i.e. log into his bank account and do a transfer). There’s a chance for procrastination, laziness, and mental inertia to prevent that donation; employees who really want MIRI to get the donation might appreciate the company handling the actual getting up and doing it part (which the company can do rather more efficiently—making one big transfer instead of hundreds of little ones, with a corresponding decrease in both individual effort and bank fees).
Also, since we’re talking potential employees, then it might be a strategic move by the company to more strongly attract potential employees who strongly value MIRI donations and reduce the company’s attraction to potential employees who do not value MIRI donations.
What about those who treat matching donations as an applause light, and simply do it because it is ingroup behaviour and not because they’ve followed the argument?
Isn’t the whole concept of matching donations a bit irrational to begin with? If a company thinks that MIRI is a good cause, they should give money to MIRI. If they think that potential employees will be motivated by them giving money to MIRI, wouldn’t a naive application of economics predict that employees would value a salary increase of a particular amount at a utility that is equal or greater than the utility of that particular amount being donated to MIRI? An employee can convert a $1000 salary increase to a $1000 MIRI donation, but not the reverse. Either the company is being irrational, or it is expecting its employees to be irrational.
In some jurisdictions it may be cheaper for the company to donate a given amount to charity than to pay it to an employee (because of tax rules intended to incentivize charitable donations).
The company may value both employee-motivation and helping charities.
The company may value being seen as the sort of company that helps charities.
This seems like a correct answer. The company (1) wants to be seen as the sort of company that helps charities, (2) doesn’t care deeply about the charities, and (3) wants to motivate employees.
The first part explains why they have a budget for charities, and the second and third part together explain why they let employees allocate that budget instead of the company doing it itself. The charitable explanation of the second part is that the company trusts their employees to have good knowledge about charities, and thus kinda outsources the research of good charities to them.
On the other hand, an uncharitable explanation is that if most employees don’t donate to charities, then this strategy allows the company to appear more generous than it actually is. For example, if a company with 1000 employees publicly declares to match each employee’s donations up to $1000, it gives an impression as if they are going to donate $1000000 to charities, while in fact they may know that only five of their employees actually donate to charities, so the expected expense is $5000. (There is a risk this could backfire, but maybe they did experiments with smaller sums in the previous years, and/or maybe there is a small print somewhere making an exception in the case that too many employees decide to donate.)
There no reason to call a practice irrational simply because you don’t understand it and it’s not explained by naive application of classical economics.
It seems to be good for branding. We know that spending money for others makes people happier. Employees who donate are happier than those who don’t. That’s valuable to the company.
An employee can convert a $1000 increase into a $1000 MIRI donation, but that requires the employee to get up and do something (i.e. log into his bank account and do a transfer). There’s a chance for procrastination, laziness, and mental inertia to prevent that donation; employees who really want MIRI to get the donation might appreciate the company handling the actual getting up and doing it part (which the company can do rather more efficiently—making one big transfer instead of hundreds of little ones, with a corresponding decrease in both individual effort and bank fees).
Also, since we’re talking potential employees, then it might be a strategic move by the company to more strongly attract potential employees who strongly value MIRI donations and reduce the company’s attraction to potential employees who do not value MIRI donations.