Professor of Marketing
Member of the Department of Marketing faculty until 2017
In a world with no shortage of problems, many of us hope to positively impact others through our actions as consumers or donors.
As consumers, for instance, we focus on ethical considerations such as sustainability or social justice when choosing which products to purchase. As donors, we turn to tools such as GiveWell and Charity Navigator, which help to quantify the social returns on donations to a given charity, suggesting that we don’t want to just do good—we want to do the most good possible.
But the world is complex, and efforts to do good can have unintended consequences, according to marketing professors Aparna Labroo of Kellogg and Kelly Goldsmith of Vanderbilt, who recently developed a framework for thinking more deeply about making a positive social impact. Their framework was developed as part of a special issue of the Journal of Consumer Psychology on prosocial behavior, which was also edited by the pair.
“Trade-offs and maximizing impact of any investment is at the heart of marketing. But this lens is rarely applied to doing greater good, where resources to do good may be even more constrained than the problems they can solve. Making a difference means making a trade-off: understanding that every action by a consumer or donor comes with a cost. And what is the cost; what is the benefit?” says Labroo.
Here, Labroo and Goldsmith present a three-step guide that people can use to more thoughtfully reflect on their own efforts to do good.
Unfortunately, it’s not uncommon for even the most well-intentioned efforts to backfire.
This is sometimes called the “cobra effect” after a well-known parable involving British bureaucrats in India who, appalled by the numbers of cobras roaming the streets, offered a bounty on them to drive their numbers down—only for entrepreneurial cobra breeders to get in on the action, and ultimately make the problem far worse.
Modern day examples of the cobra effect are everywhere in the social-impact space. For instance, when NGOs enter a new community hoping to do some good, research suggests that they may inadvertently poach local employees who are already providing similar services for governmental or other home-grown organizations. Similarly, in the for-profit world, when TOMS began donating free shoes to lower-income countries, local entrepreneurs were inundated with cheap competition.
This is why it is so important to carefully consider the potential trade-offs of our decisions, according to Labroo and Goldsmith. Rather than taking prosocial claims at face value, we should strive to slow down and think things through. What are the possible downstream consequences of this action—today and in the future?
“Every time you choose to give to one charity, that generally means you’re not giving money to a different charity. It’s not to say, ‘don’t give,’ it’s just to say, think it through.”
— Kelly Goldsmith
Goldsmith points out she and others who study consumer behavior often fail to do this themselves. They might investigate how to nudge consumers to purchase eco-friendly detergent, for instance, but not consider whether this nudge will have downstream consequences. What if splurging for an eco-friendly detergent makes consumers less likely to purchase another product that is even more eco-friendly? What if consumers are then less likely to take public transportation or engage in other activities that might have a larger impact on the climate?
“We manipulate something in the lab, and we see what happens in the lab, and we write a paper about that thing, and that’s where it ends,” says Goldsmith.
In short, we should scrutinize ourselves as much as many of us now do corporations. Thanks to increased consumer education and corporate transparency, we now have more visibility into the costs of corporate decisions. “So as a result, we are now holding corporations to a much higher standard,” says Goldsmith. Now, “we also need to apply the same lens to ourselves.”
Labroo says that this kind of consideration is already starting to happen. She points to public debates around the tradeoffs involved in sending humanitarian aid to Afghanistan under Taliban rule or donating to popular charities that have come under scrutiny for how they manage their funds.
Once you have a slightly better understanding of the possible trade-offs involved in a given purchase or donation, it’s worth asking: Are there ways to mitigate the possible harms and maximize the benefits?
For instance, a downside of charitable giving is that many people don’t like to feel as though they are accepting charity. But reframing how the donation is offered could make a difference. So, says Labroo, someone dropping off a meal to a family in need might frame the donation as simply “paying it forward” and share a time when they benefited from another’s generosity.
And consider amplifying positive outcomes—even those that come from ulterior motives. For example, doing things for arguably selfish reasons—such as looking good in front of our neighbors and colleagues, wanting to feel connected to others, or simply wanting to feel useful—can still have a net positive impact on others’ lives. Indeed, rather than trying to tamp down on these motives, and insist we (and others) act only selflessly, leaning into the desires can make it easier and more enticing to do good.
“UNICEF doesn’t care if you gave because you’re selfish or you gave because you’re generous,” says Goldsmith. “If we start to get more introspective about why we’re engaging in greater good, I think we also need to show ourselves a little bit of compassion.”
Ultimately, it is impossible to fully understand the consequences of any action—so setting this as the bar to act can be counterproductive. The impulse to dissect every possible decision can go too far, leading to a kind of paralysis.
Goldsmith was recently included in a text chain full of other parents discussing the pros and cons of purchasing local vs. organic produce for their children. “At the end of this text chain I was literally like, ‘I can eat nothing,’” she joked.
Instead, the goal is simply to move beyond the most superficial or direct consequences, take a few minutes to consider your broader impact, and then shape your response to make that impact as positive as possible.
“Resources are limited,” says Goldsmith. “Every time you choose to give to one charity, that generally means you’re not giving money to a different charity. It’s not to say, ‘don’t give,’ it’s just to say, think it through. … I think that will hopefully not reduce charitable giving, but will lead to more informed, thoughtful, prosocial behavior.”
Above all, says Labroo, have some humility about the wisdom of your choice. She argues that at their most extreme, philosophies such as effective altruism can be shortsighted. For instance, according to one interpretation of effective altruism, the world would be better off if a lawyer making $600 an hour simply worked an extra hour and donated $600 to charity rather than spending that hour volunteering at a food bank.
This could absolutely be correct. But not necessarily. The act of volunteering could motivate that individual to develop a deeper relationship with the food bank in the future. Or they might volunteer and donate—and convince their friends to do the same.
“If we strip the warm glow out of it, down the road we’re going to get less participation,” says Goldsmith.
There is no single right or wrong answer about what to do, nor is there a single set of values that should shape our calculations, says Labroo. Nor should there be.
“Across the population, we will deliver a bigger set of good if everyone is just a little cognizant about what they are doing,” she says.
Jessica Love is the editor in chief of Kellogg Insight.
Labroo, Aparna A., and Kelly Goldsmith. 2021. "The Dirty Underbelly of Prosocial Behavior: Reconceptualizing Greater Good as an Ecosystem with Unintended Consequences." Journal of Consumer Psychology.