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TheStreet Open House

Giving makes us happier, but what if you don't have much to give?





This article is by staff writer Kristin Wong.

Maybe it's because I'm getting older, or maybe it's that I'm in a better financial place than I was just a few years ago, but lately, I've been thinking a lot more about giving back.

In recent years, it's becoming more important to me to be socially conscious and charitable. I'm secure, I'm healthy, and I'm free. That contentment seems to urge me to check in on the rest of the world.

Or, maybe it's coming from a more selfish place.

According to a new research paper from Harvard Business School, spending money on others makes us happy.

Giving makes us happier

The paper, titled, "Prosocial Spending and Happiness," was published this year in Current Directions in Psychological Science. In it, psychologists write:

"Although a great deal of research has shown that people with more money are somewhat happier than are people with less money, our research demonstrates that how people spend their money also matters for their happiness. In particular… people who spend money on others report more happiness."

The researchers cite a 2008 study they conducted. Subjects were given five dollars or 20 dollars to spend by the end of the day. Half of the participants were told to buy themselves something nice. The other half were instructed to use the money to help somebody in need.

Results found that the givers reported greater happiness:

"That evening, people who had been assigned to spend the money on someone else reported happier moods over the course of the day than did those people assigned to spend the money on themselves."

Other research seems to suggest that feeling happiness after giving is an innate trait. In 2012, one of the researchers, Lara Aknin, conducted a study that involved toddlers under the age of two. Aknin found that when toddlers gave away crackers to a puppet, they "exhibited more happiness" than when they kept the crackers for themselves.

Of course, it's not that simple. Conflicting studies have found that giving back doesn't always increase happiness. For example, a 2010 study found that people only felt happier about giving money away when they had a choice of how much to give.

Overall, the paper suggested that organizations can appeal to possible donors by maximizing "the emotional benefits of giving." Basically, make people feel happy about giving.

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