Berkeley Program in Law and Economics

Many Americans donate little or nothing to charity. Our social environment is the cause, not human nature. Experiments show that people are generous when their contributions are observable by others. Taking advantage of this fact, we propose a small policy change to increase transparency and elicit generosity. Specifically, we propose that the IRS establish a voluntary donation registry to publicize the proportion of income that individuals donate to charity. Although participation would be voluntary, it would be subject to social pressure. The disclosure created by the registry should significantly increase funds for social goods without increasing taxes.