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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 non-convex 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.

Suggested Citation

  • Huck, Steffen & Rasul, Imran & Shephard, Andrew, 2013. "Comparing Charitable Fundraising Schemes: Evidence from a Natural Field Experiment and a Structural Model," CEPR Discussion Papers 9648, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9648
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    References listed on IDEAS

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    Cited by:

    1. Adena, Maja & Huck, Steffen, 2015. "Matching donations without crowding out? Some theoretical considerations and a field experiment," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113209, Verein für Socialpolitik / German Economic Association.
    2. Bassi, Vittorio & Huck, Steffen & Rasul, Imran, 2017. "A note on charitable giving by corporates and aristocrats: Evidence from a field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 104-111.
    3. Maja Adena & Steffen Huck & Imran Rasul, 2017. "Testing consumer theory: evidence from a natural field experiment," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(2), pages 89-108, December.
    4. Damgaard, Mette Trier & Gravert, Christina, 2017. "Now or never! The effect of deadlines on charitable giving: Evidence from two natural field experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 78-87.
    5. Kimberley Scharf & Sarah Smith, 2015. "The price elasticity of charitable giving: does the form of tax relief matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 330-352, April.
    6. Laura Gee & Michael Schreck, 2016. "Do Beliefs About Peers Matter for Donation Matching? Experiments in the Field and Laboratory," Framed Field Experiments 00538, The Field Experiments Website.
    7. Meer, Jonathan & Rosen, Harvey S., 2012. "Does generosity beget generosity? Alumni giving and undergraduate financial aid," Economics of Education Review, Elsevier, vol. 31(6), pages 890-907.
    8. repec:eee:ecolec:v:143:y:2018:i:c:p:236-252 is not listed on IDEAS
    9. Meer, Jonathan, 2017. "Does fundraising create new giving?," Journal of Public Economics, Elsevier, vol. 145(C), pages 82-93.
    10. Gabrielle Fack & Camille Landais, 2010. "Are Tax Incentives for Charitable Giving Efficient? Evidence from France," American Economic Journal: Economic Policy, American Economic Association, pages 117-141.
    11. repec:pri:cepsud:173rosen is not listed on IDEAS
    12. Swallow, Stephen K. & Anderson, Christopher M. & Uchida, Emi, 2018. "The Bobolink Project: Selling Public Goods From Ecosystem Services Using Provision Point Mechanisms," Ecological Economics, Elsevier, vol. 143(C), pages 236-252.
    13. repec:pri:cepsud:224rosen is not listed on IDEAS
    14. van Rijn, Jordan & Quinones, Esteban J. & Barham, Bradford L., 2017. "An Experimental Test of Gender Differences in Charitable Giving: Empathy Is at the Heart of the Matter," Staff Paper Series 586, University of Wisconsin, Agricultural and Applied Economics.
    15. Arbel, Yuval & Bar-El, Ronen & Tobol, Yossef, 2016. "Fundraising to a real-life public good – evidence from the laboratory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 27-37.
    16. Adena, Maja & Huck, Steffen, 2017. "Matching donations without crowding out? Some theoretical considerations, a field, and a lab experiment," Journal of Public Economics, Elsevier, vol. 148(C), pages 32-42.
    17. Kesternich, Martin & Löschel, Andreas & Römer, Daniel, 2016. "The long-term impact of matching and rebate subsidies when public goods are impure: Field experimental evidence from the carbon offsetting market," Journal of Public Economics, Elsevier, vol. 137(C), pages 70-78.
    18. Gee, Laura Katherine & Schreck, Michael J., 2017. "Do Beliefs about Peers Matter for Donation Matching? Experiments in the Field and Laboratory," IZA Discussion Papers 10956, Institute for the Study of Labor (IZA).
    19. Epperson, Raphael & Reif, Christiane, 2017. "Matching schemes and public goods: A review," ZEW Discussion Papers 17-070, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    20. Axel Sonntag & Daniel John Zizzo, 2014. "Reminders, payment method and charitable giving: evidence from an online experiment," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 14-04, School of Economics, University of East Anglia, Norwich, UK..
    21. Scharf, Kimberley & Smith, Sarah L., 2010. "Rational Inattention to Subsidies for Charitable Contributions," CEPR Discussion Papers 7760, C.E.P.R. Discussion Papers.
    22. Adena, Maja & Huck, Steffen, 2017. "Matching Donations Without Crowding Out?," Rationality and Competition Discussion Paper Series 16, CRC TRR 190 Rationality and Competition.
    23. Adena, Maja & Alizade, Jeyhun & Bohner, Frauke & Harke, Julian & Mesters, Fabio, 2017. "Quality certifications for nonprofits, charitable giving, and donor's trust: Experimental evidence," Discussion Papers, Research Unit: Economics of Change SP II 2017-302, Social Science Research Center Berlin (WZB).
    24. Shachar Kariv & Daniel Lee & John List & Michael Price, 2016. "The Richness of Giving: Charity Selection and Charitable Gifts in a Large Field Experiment," Artefactual Field Experiments 00559, The Field Experiments Website.
    25. Daniel Hungerman & Mark Ottoni-Wilhelm, 2016. "What is the Price Elasticity of Charitable Giving? Toward a Reconciliation of Disparate Estimates," Artefactual Field Experiments 00557, The Field Experiments Website.

    More about this item

    Keywords

    charitable giving; field experiment; structural estimation;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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