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

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  • Andreas Lange
  • Andrew Stocking

Abstract

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.

Suggested Citation

  • Andreas Lange & Andrew Stocking, 2009. "Charitable Memberships, Volunteering, and Discounts: Evidence from a Large-Scale Online Field Experiment," NBER Working Papers 14941, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14941
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    References listed on IDEAS

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    1. 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.
    2. Craig E. Landry & Andreas Lange & John A. List & Michael K. Price & Nicholas G. Rupp, 2006. "Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 747-782.
    3. Botond Kőszegi & Paul Heidhues, 2008. "Competition and Price Variation When Consumers Are Loss Averse," American Economic Review, American Economic Association, vol. 98(4), pages 1245-1268, September.
    4. Dean Karlan & John A. List, 2007. "Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment," American Economic Review, American Economic Association, vol. 97(5), pages 1774-1793, December.
    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.
    6. Rachel Croson & Jen Shang, 2006. "The impact of social comparisons on nonprofit fundraising," Natural Field Experiments 00321, The Field Experiments Website.
    7. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    8. Andreas Lange & John A. List & Michael K. Price, 2007. "Using Lotteries To Finance Public Goods: Theory And Experimental Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 901-927, August.
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    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 464-477, June.
    11. 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.
    12. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 761-784.
    13. John Morgan & Martin Sefton, 2000. "Funding Public Goods with Lotteries: Experimental Evidence," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 785-810.
    14. Armin Falk, 2007. "Gift Exchange in the Field," Econometrica, Econometric Society, vol. 75(5), pages 1501-1511, September.
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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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