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Comparing charitable fundraising schemes: Evidence from a natural 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 and structural model designed to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera, we mailed 25,000 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) how individual donations would be matched using the lead donation, using either linear, non-linear and fixed-gift matching schemes. We develop and estimate a structural model that simultaneously estimates individual responses on the extensive and intensive margins of giving, and then utilize the structural model to predict giving behavior in counterfactual fundraising schemes. We find that charitable donations are maximized by simply announcing the lead donation rather than using it to match the donations of others in some way. If lead donors insist their gifts must be matched in some way, we find the fundraiser is best off announcing the existence of a lead donor and using a nonconvex scheme to match the lead donation with individual donations. We conclude by providing evidence from a follow-up natural field experiment designed to probe further the question why lead donors are so effective in inducing others to give. -- Wir stellen Ergebnisse aus einem natürlichen Feldexperiment und der Schätzung eines strukturellen Modells vor, das zum Zwecke der Erhellung der Wirksamkeit von alternativen Fundraisingstrategien konzipiert wurde. In Zusammenarbeit mit der Bayerischen Staatsoper wurden 25.000 Opernbesucher angeschrieben und über ein gemeinnütziges Spendenprojekt informiert, das von der Staatsoper organisiert wurde. Die Adressaten wurden zufällig auf sechs verschiedene Anreizsysteme verteilt, die Verhaltensreaktionen auf Spendenaktionen messen sollten, und zwar hinsichtlich zweier Dimensionen: (1) ob es einen Großspender gibt oder nicht und (2) wie bei Bekanntgabe der Großspende die individuellen Spenden beeinflusst würden durch lineare und nicht-lineare Matchingregeln sowie durch einen festen Matchingbetrag. Wir entwickeln ein strukturelles Modell, das gleichermaßen die individuelle Wahrscheinlichkeit zu spenden sowie die Spendenhöhe einschätzt. Das entwickelte strukturelle Modell wird benutzt, um Spendenverhalten auch für kontrafaktische Matchingstrategien vorhersagen zu können. Dabei zeigt sich, dass Spenden eher dadurch maximiert werden können, dass eine Großspende bekannt gegeben als dass diese für die Aufstockung anderer Spenden benutzt wird. Bestehen Großspender darauf, dass ihre Spenden für Matching eingesetzt werden, erzielt die spendensammelnde Institution dann den größten Effekt, wenn sie die Existenz eines Großspenders bekannt gibt und eine nicht-konvexe Matchingregel für die Aufstockung individueller Spenden anwendet. Schließlich präsentieren wir Ergebnisse aus einem weiteren natürlichen Feldexperiment, bei dem näher untersucht wurde, warum Großspender andere so effektiv dazu animieren können, ebenfalls zu spenden.

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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 2012-303r.

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Date of creation: 2013
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Handle: RePEc:zbw:wzbeoc:spii2012303r

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Keywords: charitable giving; field experiment; structural estimation;

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References

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  1. Glazer, Amihai & Konrad, Kai A, 1996. "A Signaling Explanation for Charity," American Economic Review, American Economic Association, vol. 86(4), pages 1019-28, September.
  2. Gabrielle Fack & Camille Landais, 2010. "Are Tax Incentives for Charitable Giving Efficient? Evidence from France," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 117-41, May.
  3. Steven D. Levitt, 2006. "An Economist Sells Bagels: A Case Study in Profit Maximization," NBER Working Papers 12152, National Bureau of Economic Research, Inc.
  4. Dean Karlan & John A. List, 2006. "Does Price Matter in Charitable Giving? Evidence From a Large-Scale Natural Field Experiment," NBER Working Papers 12338, National Bureau of Economic Research, Inc.
  5. Dean Karlan & John A List, 2012. "How Can Bill and Melinda Gates Increase Other People’s Donations to Fund Public Goods?," Working Papers id:4880, eSocialSciences.
  6. 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.
  7. Huck, Steffen & Rasul, Imran, 2011. "Matched fundraising: Evidence from a natural field experiment," Journal of Public Economics, Elsevier, vol. 95(5), pages 351-362.
  8. Stefano DellaVigna & John A. List & Ulrike Malmendier, 2009. "Testing for Altruism and Social Pressure in Charitable Giving," NBER Working Papers 15629, National Bureau of Economic Research, Inc.
  9. Catherine Eckel & Philip Grossman, 2005. "Subsidizing charitable contributions: A field test comparing matching and rebate subsidies," Framed Field Experiments 00145, The Field Experiments Website.
  10. 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.
  11. Huck Steffen & Rasul Imran, 2010. "Transactions Costs in Charitable Giving: Evidence from Two Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-35, April.
  12. Randolph, William C, 1995. "Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 709-38, August.
  13. Brigitte C. Madrian, 2012. "Matching Contributions and Savings Outcomes: A Behavioral Economics Perspective," NBER Working Papers 18220, National Bureau of Economic Research, Inc.
  14. Dean Karlan and John A. List, 2012. "How Can Bill and Melinda Gates Increase Other People’s Donations to Fund Public Goods? - Working Paper 292," Working Papers 292, Center for Global Development.
  15. Daniel Rondeau & John List, 2008. "Matching and challenge gifts to charity: Evidence from laboratory and natural field experiments," Natural Field Experiments 00330, The Field Experiments Website.
  16. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
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Cited by:
  1. Gabrielle Fack & Camille Landais, 2010. "Are Tax Incentives for Charitable Giving Efficient? Evidence from France," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 117-41, May.
  2. Jonathan Meer & Harvey S. Rosen, 2011. "Does Generosity Beget Generosity? Alumni Giving and Undergraduate Financial Aid," Working Papers 1361, Princeton University, Department of Economics, Center for Economic Policy Studies..
  3. Jonathan Meer & Harvey S. Rosen, 2008. "The ABCs of Charitable Solicitation," Working Papers 1057, Princeton University, Department of Economics, Center for Economic Policy Studies..

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