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The Pledging Puzzle: How Can Revocable Promises Increase Charitable Giving

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  • James Andreoni
  • Marta Serra-Garcia

Abstract

What is the value of pledges if they are often reneged upon? In this paper we show - both theoretically and experimentally - that pledges can be used to screen donors and to better understand their motives for giving. In return, nonprofit managers can use the information they glean from pledges to better target future charitable giving appeals and interventions to donors, such as expressions of gratitude. In an experiment, we find that offering the option to pledge gifts induces self-selection. If expressions of gratitude are then targeted to individuals who select into pledges, reneging can be significantly reduced. Our findings provide an explanation for the potential usefulness of pledges.

Suggested Citation

  • James Andreoni & Marta Serra-Garcia, 2019. "The Pledging Puzzle: How Can Revocable Promises Increase Charitable Giving," CESifo Working Paper Series 7965, CESifo.
    • Handle: RePEc:ces:ceswps:_7965
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. KATO, Hiroki & KIM, Youngrok, 2024. "Charity Fraud : An Experimental Study of the Moral Hazard Problem in the Charity Market," Discussion paper series HIAS-E-139, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    2. C. Mónica Capra & Bing Jiang & Yuxin Su, 2022. "Do pledges lead to more volunteering? An experimental study," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 87-100, January.
    3. Argo, Nichole & Klinowski, David & Krishnamurti, Tamar & Smith, Sarah, 2020. "The completion effect in charitable crowdfunding," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 17-32.
    4. Bittschi, Benjamin & Dwenger, Nadja & Rincke, Johannes, 2021. "Water the flowers you want to grow? Evidence on private recognition and donor loyalty," European Economic Review, Elsevier, vol. 131(C).
    5. Lang, Matthias & Schudy, Simeon, 2023. "(Dis)honesty and the value of transparency for campaign promises," European Economic Review, Elsevier, vol. 159(C).
    6. Mayo, Jennifer, 2021. "How do big gifts affect rival charities and their donors?," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 575-597.

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    More about this item

    Keywords

    prosocial behavior; charitable giving; pledging; intertemporal choice;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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