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Comparing charitable fundraising schemes: Evidence from a field experiment and a structural model

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  • Huck, Steffen
  • Rasul, Imran
  • Shephard, Andrew

Abstract

We present evidence from a natural field experiment designed to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera House, we mailed 25,000 regular opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to six treatments designed to explore behavioral responses to fundraising schemes varying in two dimensions: (i) the presence of a lead donor; (ii) whether and how individual donations would be matched using the lead donation. We provide reduced form evidence from the field experiment on the causal impact of each fundraising scheme on the extensive and intensive margins of giving. We then develop and estimate a structural model of giving behavior that simultaneously estimates individual responses on both margins. We utilize the structural model to predict giving behavior in counterfactual fundraising schemes. The evidence suggests the optimal fundraising scheme is one in which the charitable organization merely announces the existence of a significant and anonymous lead donor, and does not use the lead donation to match donations in any way, be it through linear matching, non-linear matching, threshold matching, or some combination of the three. We conclude by discussing evidence from a follow-up field experiment designed to probe further the question why lead donors are effective.

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Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Economics of Change with number SP II 2012-303.

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Date of creation: 2012
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Handle: RePEc:zbw:wzbeoc:spii2012303

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Keywords: charitable giving; field experiment; structural estimation;

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References

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  1. Gerald E. Auten & Holger Sieg & Charles T. Clotfelter, 2002. "Charitable Giving, Income, and Taxes: An Analysis of Panel Data," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 371-382, March.
  2. Karlan, Dean & List, John, 2006. "Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment," Working Papers 13, Yale University, Department of Economics.
  3. 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.
  4. Stefano DellaVigna & John List & Ulrike Malmendier, 2012. "Testing for altruism and social pressure in charitable giving," Natural Field Experiments 00137, The Field Experiments Website.
  5. Huck, Steffen & Rasul, Imran, 2011. "Matched fundraising: Evidence from a natural field experiment," Journal of Public Economics, Elsevier, Elsevier, vol. 95(5), pages 351-362.
  6. Brigitte C. Madrian, 2012. "Matching Contributions and Savings Outcomes: A Behavioral Economics Perspective," NBER Working Papers 18220, National Bureau of Economic Research, Inc.
  7. repec:feb:natura:0053 is not listed on IDEAS
  8. Angrist, Joshua D., 1997. "Conditional independence in sample selection models," Economics Letters, Elsevier, Elsevier, vol. 54(2), pages 103-112, February.
  9. Randolph, William C, 1995. "Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(4), pages 709-38, August.
  10. Rondeau, Daniel & List, John A., 2008. "Matching and Challenge Gifts to Charity: Evidence from Laboratory and Natural Field Experiments," IZA Discussion Papers 3278, Institute for the Study of Labor (IZA).
  11. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, Elsevier, vol. 81(3), pages 423-447, September.
  12. Briers, Barbara & Pandelaere, Mario & Warlop, Luk, 2007. "Adding exchange to charity: A reference price explanation," Journal of Economic Psychology, Elsevier, Elsevier, vol. 28(1), pages 15-30, January.
  13. Steven D. Levitt, 2006. "An Economist Sells Bagels: A Case Study in Profit Maximization," NBER Working Papers 12152, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Meer, Jonathan & Rosen, Harvey S., 2011. "The ABCs of charitable solicitation," Journal of Public Economics, Elsevier, Elsevier, vol. 95(5), pages 363-371.
  2. Jonathan Meer & Harvey S. Rosen, 2009. "Family Bonding with Universities," NBER Working Papers 15493, National Bureau of Economic Research, Inc.
  3. de Oliveira, Angela C.M. & Croson, Rachel T.A. & Eckel, Catherine, 2011. "The giving type: Identifying donors," Journal of Public Economics, Elsevier, Elsevier, vol. 95(5-6), pages 428-435, June.
  4. Jonathan Meer, 2009. "Brother Can You Spare a Dime? Peer Effects in Charitable Solicitation," Discussion Papers, Stanford Institute for Economic Policy Research 08-035, Stanford Institute for Economic Policy Research.

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