Leadership giving in charitable fund-raising
AbstractWhy do charities often begin new capital fund drives by announcing a large contribution by a single wealthy donor? This paper explores the possibility that such "leadership giving" provides a signal to all other givers that the charity is of high quality. The dilemma is that if the lead giver can deceive others to believe the charity is of higher quality than it truly is, then these followers will make larger contributions, which will benefit the leader. Hence, the leader must give an unusually large amount to convey a credible signal of the quality. This sets up a war-of-attrition game for who will pay the cost to signal the quality. Since the wealthy have the lowest opportunity cost of providing the signal, they, in equilibrium, move first to provide the signal of quality with exceptionally large gifts. Copyright 2006 Blackwell Publishing Inc..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Wisconsin Madison - Social Systems in its series Working papers with number 13.
Date of creation: 2002
Date of revision:
Contact details of provider:
Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
- Benjamin E. Hermalin, 1997.
"Toward an Economic Theory of Leadership: Leading by Example,"
- Hermalin, Benjamin E, 1998. "Toward an Economic Theory of Leadership: Leading by Example," American Economic Review, American Economic Association, vol. 88(5), pages 1188-1206, December.
- Ben Hermalin, 1996. "Toward an Economic Theory of Leadership: Leading by Example," Working Papers _006, University of California at Berkeley, Haas School of Business.
- Bilodeau, Marc & Slivinski, Al, 1996.
"Toilet cleaning and department chairing: Volunteering a public service,"
Journal of Public Economics,
Elsevier, vol. 59(2), pages 299-308, February.
- Bilodeau, M. & Slivinsky, A., 1994. "Toilet Cleaning and Department Chairing: Volunteering a public service," Cahiers de recherche 94-01, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
- Marc Bilodeau & Al Slivinski, . "Toilet Cleaning and Department Chairing: Volunteering a Public service," Public Economics 9405001, EconWPA.
- repec:att:wimass:9006 is not listed on IDEAS
- John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
- John List & David Lucking-Reiley, 2002.
"The effects of seed money and refunds on charitable giving: Experimental evidence from a university capital campaign,"
Natural Field Experiments
00301, The Field Experiments Website.
- John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February.
- John A. List & David Lucking-Reiley, 2000. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Vanderbilt University Department of Economics Working Papers 0008, Vanderbilt University Department of Economics.
- Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
- Glazer, A. & Konrad, K.A., 1991. "A Signalling Explanation for Private Charity," GSIA Working Papers 1991-38, Carnegie Mellon University, Tepper School of Business.
- Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
- William T. Harbaugh, 1996. "What do gifts buy? A model of philanthropy and tithing based on prestige and warm glow," Public Economics 9606003, EconWPA.
- Andreoni, James, 1993.
"An Experimental Test of the Public-Goods Crowding-Out Hypothesis,"
American Economic Review,
American Economic Association, vol. 83(5), pages 1317-27, December.
- Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
- Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
- Grossman, Sanford J. & Perry, Motty, 1986. "Perfect sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 39(1), pages 97-119, June.
- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
- Mehmet Bac & Parimal Kanti Bag, 2000. "Strategic Information Revelation in Fund-Raising Campaigns," Econometric Society World Congress 2000 Contributed Papers 0178, Econometric Society.
- A. Payne, 2001. "Measuring the Effect of Federal Research Funding on Private Donations at Research Universities: Is Federal Research Funding More than a Substitute for Private Donations?," International Tax and Public Finance, Springer, vol. 8(5), pages 731-751, November.
- Bilodeau, Marc & Slivinski, Al, 1996. "Volunteering nonprofit entrepreneurial services," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 117-127, October.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ailsenne Sumwalt).
If references are entirely missing, you can add them using this form.