Researchers have long been interested in understanding the factors that contribute to people’s sense of subjective wellbeing. Another stream of research has also shown that volunteering work and charitable donations also increase subjective wellbeing. This stream of research suggests that people who give their time and money towards volunteering and charitable causes report higher life satisfaction, self-esteem, sense of control over life, physical health, and are less likely to suffer depression (see, for example, Bekkers and Wiepking 2011; Choi and Kim 2011; McMunn et al. 2009; Morrow-Howell et al. 2003; Wilson 2000). This consensus in the literature converges with related findings on the positive relationship between subjective wellbeing and generosity (Lane 2017). Thus, volunteering/charity donations and SWB affect each other positively.
However, charities differ in size (e.g. small, medium, large), geographical location (local, international) and function (animal welfare, human rights and poverty eradication). Volunteering can also be classified as either formal (organisation-based) or informal (outside of formal organisations) (Lee and Brudney 2012). These different
1 In this study, our main measure of subjective wellbeing is self- reported life satisfaction although we also use happiness a proxy for wellbeing in robustness checks.
wellbeing (SWB). For example, research has found that factors such as income, education, religiosity and social capital, among others, positively influence self-reported wellbeing (see, for example, Awaworyi Churchill and Mishra 2017; Diener and Oishi 2000; Easterlin 1995). These findings have been consistent across both developing and developed countries.
Another stream of research has also shown that volunteering work and charitable donations also increase subjective wellbeing. This stream of research suggests that people who give their time and money towards volunteering and charitable causes report higher life satisfaction, self-esteem, sense of control over life, physical health, and are less likely to suffer depression (see, for example, Bekkers and Wiepking 2011; Choi and Kim 2011; McMunn et al. 2009; Morrow-Howell et al. 2003; Wilson 2000). This consensus in the literature converges with related findings on the positive relationship between subjective wellbeing and generosity (Lane 2017). Thus, volunteering/charity donations and SWB affect each other positively.
However, charities differ in size (e.g. small, medium, large), geographical location (local, international) and function (animal welfare, human rights and poverty eradication). Volunteering can also be classified as either formal (organisation-based) or informal (outside of formal organisations) (Lee and Brudney 2012). These different charities and volunteering types operate differently, have different goals, provide different levels of access and engagement, and have a different impact on individuals and other stakeholders (Dovidio et al. 2017; Wilson 2000).
Previous research, however, has not fully explored if the type of volunteering and charity organisations that people engage with specifically affects SWB differently. The existing literature has examined the factors that influence individual decisions to engage in formal or informal volunteering (e.g. Plagnol and Huppert 2010; Van Tienen et al. 2011; Wang et al. 2017). For example, Mitani (2014) found that while education influences formal volunteering more than informal volunteering, religiosity and empathy influences both formal and informal volunteering. Other research focuses on conceptual and methodological aspects of formal and informal volunteering (Finkelstein and Brannick 2007; Handy et al. 2000; Stebbins 1996). How- ever, to the best of our knowledge, prior research has not focused on whether participating in formal or informal volunteering have differential effects on SWB.
This also applies to charity type. Research on charity types focuses on factors that influence people’s decisions to donate to certain charities and not to others (See Bekkers and Wiepking 2011 for a review). The literature also examines people’s response to charity advertisement, and how to develop marketing strategies for different types of charity (see, for example, Drollinger 2018; Pope et al. 2009; Strahilevitz and Myers 1998). Although evidence from these studies suggests that charity donations positively affect SWB, some gaps still exist in the literature on whether donations to certain types of charity have any differential impact on SWB.
The present study re-examines the relationship between volunteering and SWB and further considers if the model of the volunteering work (formal vs. informal) and the geographical location of the charity organisation (local vs. international) people donate to has any impact on subjective wellbeing. We ask: (1) Does informal volunteering lead to greater SWB than formal volunteering, or vice versa and (2) Does donating to a local charity lead to greater SWB than international charity, or vice versa? Towards addressing these research questions, we employ the construal-level theory to develop two hypotheses that we test using data from the UK’s Community Life Survey.
We further address issues of endogeneity which have not received much attention within this literature. For instance, while volunteering affects wellbeing, it is likely that wellbeing could also affect volunteering. It is likely that individuals with higher levels of wellbeing would be
more inclined to join volunteering groups to give back to society. Further, it is also likely that individuals with lower levels of wellbeing might seek to join a volunteering organisation to promote their self-worth as well as satisfaction about themselves and their lives. This reverse causality raises concerns of endogeneity, which have not been resolved in the literature mainly due to difficulty in finding appropriate instruments. We, therefore, use Lewbel (2012) internally generated instrumental variable approach to control for potential endogeneity and as a robustness check to our main results.
The remainder of our study is structured as follows. The next section briefly introduces our underlying theory and hypotheses. ‘‘Data’’ and ‘‘Empirical Specification and Methods’’ sections discuss the data and empirical methods, respectively. ‘‘Results’’ section presents the results, while ‘‘Discussion and Conclusions’’ section concludes with a brief discussion and policy implications.
