People with more Facebook friends are less likely to give to charity, according to research carried out in the West Midlands.
Kimberley Scharf, professor of economics at the University of Warwick, claims in a theoretical research paper that people with a large number of social network connections may rely on others to donate.
The academic, who works at the Centre for Competitive Advantage in the Global Economy in the university’s Department of Economics, argued that when people have larger online social networks, they rely on other people to pass on information about opportunities to give – a phenomenon called ‘free-riding’.
She said: “As well as relying on others to pass on information, it may also be true that people are even relying on others to donate.”
Ms Scharf said her study shows that people who have smaller, closer-knit groups of friends who share common interests tend to give more to good causes than those who have formed large loosely connected groups.
In the paper, Prof Scharf developed an economic model of donating where people share overlapping social neighbours.
Prof Scharf will present her research paper at the International Institute of Public Finance’s 2012 Congress in Germany this month and hopes to work with the website JustGiving to test her theory.
The paper was borne out of Prof Scharf’s research on charitable giving through initiatives likes Gift Aid, where she found that the Government was slow to takeup giving through social networks.
“We are collecting data now from social networks and going to test the theory and look at evidence for and against,” she said.
In May, West Midlands charity leaders welcomed the Government’s u-turn on a controversial cap on tax relief for philanthropic giving.
Chancellor George Osborne announced in the Budget a limit of £50,000 or 25 per cent of income, whichever was higher, on the amount a person could donate instead of paying it in tax. The chancellor said he had been “shocked” by the scale of legal tax avoidance by the very rich, after seeing the result of a confidential study by HM Revenue and Customs and this was a “specific” loophole he wanted to close.
Under current rules higher rate taxpayers can donate unlimited amounts of money to charity, and offset it against their tax bill to effectively bring the amount of tax they pay down, sometimes to zero.