The one you refer to was mentioned in http://lesswrong.com/lw/n9/the_intuitions_behind_utilitarianism/:

Other recent research shows similar results. Two Israeli psychologists asked people to contribute to a costly life-saving treatment. They could offer that contribution to a group of eight sick children, or to an individual child selected from the group. The target amount needed to save the child (or children) was the same in both cases. Contributions to individual group members far outweighed the contributions to the entire group.

Link is dead, but the article is here http://foreignpolicy.com/2007/03/13/numbed-by-numbers/.

The original study seems to be Kogut and Ritov, 2005. I found a pdf through Google scholar search (always a good way to find studies) over here.