Sharing in Second Life: Charity in the Virtual Economy

Relay for LifeRelay for Life

Many virtual worlds have a large, overarching economy, based on market economy principles. However, these economies can also contain smaller economies that function somewhat differently from the overarching economic features of the world. While Second Life is based largely on a market economy, there are other economic elements such as charity that also come into effect in ways that can be both interesting and potentially useful for understanding both online and offline giving.

Charitable works within Second Life can be remarkably effective. While there are many smaller charitable causes supported throughout the world, there are also examples of significant and highly successful charitable drives. For instance, Second Life’s 2010 Relay for Life raised US $222,804 for cancer research while the 2009 event raised US $ $274,000.

The success of these endeavours raises the question of what makes charitable efforts so successful within the virtual world, and centres on three main features of the world and its economic system: resident generosity, small but frequent donations, and the ability to offer virtual goods in order to benefit charitable causes.

First, although there are also elements of Second Life and its economy that may facilitate charitable donations, a great many Second Life residents are inclined to be generous in a multitude of ways, as seen in the significant amounts raised for Relay for Life and other charitable causes.

There are, however, elements of the virtual world that can help to redefine and increase charitable giving. In the case of donations, it can be easy to give relatively small amounts in Second Life. Donations of 20, 50, 100, or even 250 Lindens are common, but with the exchange rate of around 250 Lindens to one U.S. dollar, 20 Lindens equals about $0.08 and 100 equals about $0.40. Although the amounts may be relatively small when converted to USD, many small donations can add up quickly. At these levels, most residents can afford to donate. As a result, it is appears that more residents are donating than otherwise would if donations were expected to be higher. Consequently, the frequency of donations can drastically increase the total amounts donated even when the amount of each donation is relatively small.

While many residents give generously on their own and without expectations, there are also charitable efforts in Second Life that are based around more reciprocal arrangements where virtual goods also come into play. Because virtual goods do not usually have many associated material costs, it also very common to find items donated for charitable causes and then either given away to donors or sold so that profits can be donated.

Offering goods is an established technique for generating charitable income in three interrelated ways. First, the act of giving something away – a flower, perhaps, or return stickers for addressing envelopes – generates a sense of expected reciprocity. This tactic can make the recipient more likely to feel that they owe something in return for the small gift they have been given. Second, getting something in return for a donation is rewarding for those who are giving. This is the model frequently adopted in fundraising drives of public television stations as well as by charities who based their fundraising efforts on reciprocal arrangements. Receiving a tote bag, CD, or pin as recognition for making a donation is an attractive way to encourage giving by allowing the giver to receive something in return. Finally, releasing specially created items for purchase with proceeds going to charity is an effective way to generate funds. With goods available for purchase, residents can go about their normal consumption activities while still supporting charitable works.

Generally speaking, it is the latter two models that seem to arise most frequently in Second Life, especially with regards to some of the larger fundraising events. Given the extremely high quality and established generosity of many Second Life designers, there is no shortage of donated goods available on which to base charitable efforts. Furthermore, because they are virtual, there are few, if any, costs required to create a large number of whatever goods are offered for sale. At the same time, by offering goods to individuals in exchange for their Lindens, those who support charities with their purchases also get something of their own choice in return.

Despite the fact that funds are spread out over a huge number of charities and causes, the potential effects of such efforts are not lost in Second Life. Although there are hundreds (if not thousands) of in-world charitable causes and efforts, Relay for Life is one of the largest examples of charitable giving in Second Life with their US $222 804 contribution in 2010. This amount was raised using a combination of sponsorship, stand-alone donations and the sale and auction of a huge variety of virtual goods.

While virtual worlds are certainly worthy of consideration in their own right, perhaps there are lessons that we can take from instances of charitable giving to apply in other situations. Offline we are perhaps not as free of the costs of offering goods in exchange for donations. However, the combination of many small donations and the offering of virtual goods as a form of donor recognition is a powerful way of generating contributions that can raise significant funds for charitable causes that have very definite and positive effects.

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4 thoughts on “Sharing in Second Life: Charity in the Virtual Economy

  1. An interesting story, but the math on the talk about exchange of Lindens is off, one way or another–either the exchange rate of 250 Lindens = 1 dollar, or the breakdown of the exchange rates–as at that exchange rate, 100 lindens would equal 40 cents, and 20 lindens would equal 8 cents–not the 12/60 breakdown that seems to indicate an exchange rate of around 170 lindens per dollar.

  2. Thanks for pointing out the error – although the exchange rate was correct, the math was off, and the post has been edited to reflect this.

  3. Hi Jennifer, great article, thanks! I like your analysis of the motivations and how virtual goods relate to them. Reciprocity is one keyword; low transaction costs might be another.

    Incidentally, I co-authored a paper on prosocial behaviour in an MMO some time ago, and hope to be able to blog about it soon if it’s accepted.

    As you probably know, there’s a big stream of literature on prosocial behaviour and helping behaviour in social psychology. A question often examined is, how individual characteristics (e.g., sex of the helper and helpee) and environment (e.g., city vs. countryside) influence the likelihood of helping. Virtual environments add a new dimension to the environment studies, but I think they can also be used as labs to learn something about the influence of sex, for example.

  4. I absolutely agree that there are some really interesting elements of prosocial behaviour that are possible in virtual worlds (and, given the ways in which these worlds are sometimes negatively positioned, they’re really important to look at). It could be interesting breaking down these features a bit more in the ways that you suggest and looking at some of the demographics and other elements that feed in. I’m actually developing some other work in this area right now as well, and look forward to reading you paper when it’s available.

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