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Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty

Author

Listed:
  • Benjamin Bittschi
  • Nadja Dwenger
  • Johannes Rincke

Abstract

We study donor loyalty in the context of church membership in Germany. Church members have to make substantial payments to their church but can opt out at any time. In a large-scale field experiment, we examine how private recognition for past payments affects church members’ loyalty. We find that recognizing past payments in a letter significantly reduces opt-outs. This effect is driven by members in the bottom quartile of baseline payments to the church. Consistent with optimization frictions prior to the experiment, we observe a spike in opt-outs immediately after treatment for particularly costly memberships.

Suggested Citation

  • Benjamin Bittschi & Nadja Dwenger & Johannes Rincke, 2020. "Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty," CESifo Working Paper Series 8424, CESifo.
  • Handle: RePEc:ces:ceswps:_8424
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    More about this item

    Keywords

    private recognition; donor loyalty; charitable giving; field experiment; recurring donors;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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