IDEAS home Printed from https://ideas.repec.org/p/cte/werepe/we1408.html

Learning by Fund-raising

Author

Listed:
  • Name Correa, Álvaro

Abstract

From experience, fund-raisers learn to become more efficient solicitors. This paper incorporates fund-raising technology into the theory of charitable giving. A full characterization of the solicitation strategy that maximizes donations net of fund-raising costs is provided. The strategy identi.es a fundraiser incentive to invest in learning by soliciting some early donors who would give less than their solicitation costs. A notion of “excessive” fund-raising is introduced. It is shown that this may worsen with learning. Our model also accomodates a technology with overhead costs. An extension with rising solicitation costs is also considered.

Suggested Citation

  • Name Correa, Álvaro, 2014. "Learning by Fund-raising," UC3M Working papers. Economics we1408, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we1408
    as

    Download full text from publisher

    File URL: https://e-archivo.uc3m.es/rest/api/core/bitstreams/01ebefc8-0032-4149-837d-49165b537e8c/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yörük, BarIs K., 2009. "How responsive are charitable donors to requests to give?," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1111-1117, October.
    2. Meer, Jonathan & Rosen, Harvey S., 2011. "The ABCs of charitable solicitation," Journal of Public Economics, Elsevier, vol. 95(5), pages 363-371.
    3. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(2), pages 327-358.
    4. Alvaro J. Name-Correa & Huseyin Yildirim, 2013. "A Theory of Charitable Fund-Raising with Costly Solicitations," American Economic Review, American Economic Association, vol. 103(2), pages 1091-1107, April.
    5. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-793, September.
    6. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 761-784.
    7. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
    8. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    9. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-148, February.
    10. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
    11. Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-437, April.
    12. James Andreoni, 2006. "Leadership Giving in Charitable Fund‐Raising," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 1-22, January.
    13. John A. List, 2011. "The Market for Charitable Giving," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 157-180, Spring.
    14. Ilya Segal, 1999. "Contracting with Externalities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 337-388.
    15. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    16. Argote, L. & Epple, D., 1990. "Learning Curves In Manufacturing," GSIA Working Papers 89-90-02, Carnegie Mellon University, Tepper School of Business.
    17. Amihai Glazer & Kai A. Konrad, 2008. "A Signaling Explanation for Charity," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 713-722, Springer.
    18. C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September.
    19. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    20. Susan Rose-Ackerman, 1982. "Charitable Giving and “Excessive†Fundraising," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(2), pages 193-212.
    21. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    22. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    23. Andreoni, James & McGuire, Martin C., 1993. "Identifying the free riders : A simple algorithm for determining who will contribute to a public good," Journal of Public Economics, Elsevier, vol. 51(3), pages 447-454, July.
    24. McAfee, R Preston & Schwartz, Marius, 1994. "Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity," American Economic Review, American Economic Association, vol. 84(1), pages 210-230, March.
    25. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    26. A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Name-Correa, Alvaro J. & Yildirim, Huseyin, 2016. "“Giving” in to social pressure," Games and Economic Behavior, Elsevier, vol. 99(C), pages 99-116.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huseyin Yildirim & Alvaro Name Correa, 2011. "A Theory of Charitable Fund-Raising with Costly Solicitations," Levine's Working Paper Archive 786969000000000222, David K. Levine.
    2. Alvaro J. Name-Correa, 2017. "Learning by fund-raising," Review of Economic Design, Springer;Society for Economic Design, vol. 21(4), pages 291-316, December.
    3. Paskalev, Zdravko & Yildirim, Huseyin, 2017. "A theory of outsourced fundraising: Why dollars turn into “Pennies for Charity”," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 1-18.
    4. Gong, Ning & Grundy, Bruce D., 2014. "The design of charitable fund-raising schemes: Matching grants or seed money," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 147-165.
    5. Serge-Christophe Kolm, 2008. "Paradoxes of the War on Poverty: Warm-Glows and Efficiency," IDEP Working Papers 0807, Institut d'economie publique (IDEP), Marseille, France, revised 18 Nov 2008.
    6. Mehmet Bac & Parimal Kanti Bag, 2000. "Strategic Information Revelation in Fund-Raising Campaigns," Econometric Society World Congress 2000 Contributed Papers 0178, Econometric Society.
    7. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    8. Rotemberg, Julio J., 2014. "Charitable giving when altruism and similarity are linked," Journal of Public Economics, Elsevier, vol. 114(C), pages 36-49.
    9. Zachary Halberstam & James R. Hines Jr., 2023. "Quality-Aware Tax Incentives for Charitable Contributions," CESifo Working Paper Series 10250, CESifo.
    10. Jingping Li & Yohanes E. Riyanto, 2017. "Category Reporting In Charitable Giving: An Experimental Analysis," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 397-408, January.
    11. Alan Krause, "undated". "Taxing and Subsidising Charitable Contributions," Discussion Papers 09/23, Department of Economics, University of York.
    12. Yamamoto, Wataru, 2013. "Negative economic consequences of ethical campaigns?: Market data evidence," MPRA Paper 49070, University Library of Munich, Germany.
    13. Jochimsen, Beate, 2019. "Christmas lights in Berlin: New empirical evidence for the private provision of a public good," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 19-04, University of Cologne, FiFo Institute for Public Economics.
    14. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    15. Yildirim, Huseyin, 2014. "Andreoni–McGuire algorithm and the limits of warm-glow giving," Journal of Public Economics, Elsevier, vol. 114(C), pages 101-107.
    16. Tobias Cagala & Ulrich Glogowsky & Johannes Rincke & Anthony Strittmatter, 2021. "Optimal Targeting in Fundraising: A Machine-Learning Approach," Economics working papers 2021-08, Department of Economics, Johannes Kepler University Linz, Austria.
    17. Edwards, James T. & List, John A., 2014. "Toward an understanding of why suggestions work in charitable fundraising: Theory and evidence from a natural field experiment," Journal of Public Economics, Elsevier, vol. 114(C), pages 1-13.
    18. Lange, Andreas & Price, Michael K. & Santore, Rudy, 2017. "Signaling quality through gifts: Implications for the charitable sector," European Economic Review, Elsevier, vol. 96(C), pages 48-61.
    19. Ashlyn Aiko Nelson & Beth Gazley, 2014. "The Rise of School-Supporting Nonprofits," Education Finance and Policy, MIT Press, vol. 9(4), pages 541-566, October.
    20. Echazu, Luciana & Nocetti, Diego, 2015. "Charitable giving: Altruism has no limits," Journal of Public Economics, Elsevier, vol. 125(C), pages 46-53.

    More about this item

    Keywords

    ;

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cte:werepe:we1408. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Poveda (email available below). General contact details of provider: http://www.eco.uc3m.es/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.