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Charitable Memberships, Volunteering, and Discounts: Evidence from a Large-Scale Online Field Experiment

  • Andreas Lange
  • Andrew Stocking

Despite the increasing use by charities, significant uncertainty exists about optimal online fundraising mechanisms, especially when large donor pools show substantial heterogeneities. We use an online natural field experiment with over 700,000 subjects to test theory on price discounts and show large differences in donation behavior between donors who have previously given money and/or volunteered. For example, framing the charity's membership price as a discount increases response rates and decreases conditional contributions from former volunteers, but not from past money donors. Our study thereby demonstrates the importance of conditioning fundraising strategies on the specifics of past donation dimensions.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14941.

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Date of creation: May 2009
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Handle: RePEc:nbr:nberwo:14941
Note: EEE PE
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  1. Dean Karlan & John List, 2006. "Does price matter in charitable giving? Evidence from a large-scale natural field experiment," Natural Field Experiments 00279, The Field Experiments Website.
  2. Morgan, John & Sefton, Martin, 2000. "Funding Public Goods with Lotteries: Experimental Evidence," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 785-810, October.
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  4. Andreas Lange & Craig Landry & John List & Michael Price & Nicholas Rupp, 2006. "Toward an understanding of the economics of charity: Evidence from a field experiment," Natural Field Experiments 00292, The Field Experiments Website.
  5. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
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  7. Chen Yan & Li Xin & MacKie-Mason Jeffrey K, 2005. "Online Fund-Raising Mechanisms: A Field Experiment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(2), pages 1-39, December.
  8. 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.
  9. Kyle Bagwell & Michael Riordan, 1988. "High and Declining Prices Signal Product Quality," Discussion Papers 808, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Armin Falk, 2007. "Gift Exchange in the Field," Econometrica, Econometric Society, vol. 75(5), pages 1501-1511, 09.
  11. Botond Kőszegi & Paul Heidhues, 2008. "Competition and Price Variation When Consumers Are Loss Averse," American Economic Review, American Economic Association, vol. 98(4), pages 1245-68, September.
  12. 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 1447-58, December.
  13. Morgan, John, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 761-84, October.
  14. Jen Shang & Rachel Croson, 2006. "The impact of social comparisons on nonprofit fundraising," Natural Field Experiments 00321, The Field Experiments Website.
  15. 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.
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