IDEAS home Printed from https://ideas.repec.org/p/zbw/wzbeoc/spii2012303r.html
   My bibliography  Save this paper

Comparing charitable fundraising schemes: Evidence from a natural field experiment and a structural model

Author

Listed:
  • 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 nonconvex 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," Discussion Papers, Research Unit: Economics of Change SP II 2012-303r, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbeoc:spii2012303r
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/83023/1/768553628.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jan Potters & Martin Sefton & Lise Vesterlund, 2007. "Leading-by-example and signaling in voluntary contribution games: an experimental study," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 169-182, October.
    2. Gabrielle Fack & Camille Landais, 2010. "Are Tax Incentives for Charitable Giving Efficient? Evidence from France," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 117-141, May.
    3. Karlan, Dean & List, John A., 2020. "How can Bill and Melinda Gates increase other people's donations to fund public goods?," Journal of Public Economics, Elsevier, vol. 191(C).
    4. 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.
    5. Stefano DellaVigna & John A. List & Ulrike Malmendier, 2012. "Testing for Altruism and Social Pressure in Charitable Giving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 1-56.
    6. Daniel Rondeau & John List, 2008. "Matching and challenge gifts to charity: evidence from laboratory and natural field experiments," Experimental Economics, Springer;Economic Science Association, vol. 11(3), pages 253-267, September.
    7. Huck Steffen & Rasul Imran, 2010. "Transactions Costs in Charitable Giving: Evidence from Two Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-35, April.
    8. de Oliveira, Angela C.M. & Croson, Rachel T.A. & Eckel, Catherine, 2011. "The giving type: Identifying donors," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 428-435, June.
    9. Huck, Steffen & Rasul, Imran, 2011. "Matched fundraising: Evidence from a natural field experiment," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 351-362, June.
    10. Steffen Huck & Imran Rasul & Andrew Shephard, 2015. "Comparing Charitable Fundraising Schemes: Evidence from a Natural Field Experiment and a Structural Model," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 326-369, May.
    11. John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February.
    12. Randolph, William C, 1995. "Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 709-738, August.
    13. Steven D. Levitt, 2006. "An Economist Sells Bagels: A Case Study in Profit Maximization," NBER Working Papers 12152, National Bureau of Economic Research, Inc.
    14. 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.
    15. Brigitte C. Madrian, 2012. "Matching Contributions and Savings Outcomes: A Behavioral Economics Perspective," NBER Working Papers 18220, National Bureau of Economic Research, Inc.
    16. Andreoni, James & Petrie, Ragan, 2004. "Public goods experiments without confidentiality: a glimpse into fund-raising," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1605-1623, July.
    17. John List & Michael Price, 2012. "Charitable Giving Around the World: Thoughts on How to Expand the Pie," Natural Field Experiments 00470, The Field Experiments Website.
    18. Dean Karlan and John A. List, 2012. "How Can Bill and Melinda Gates Increase Other People’s Donations to Fund Public Goods? - Working Paper 292," Working Papers 292, Center for Global Development.
    19. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    20. 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.
    21. repec:feb:framed:0087 is not listed on IDEAS
    22. repec:feb:natura:0053 is not listed on IDEAS
    23. Bracha, Anat & Menietti, Michael & Vesterlund, Lise, 2011. "Seeds to succeed?," Journal of Public Economics, Elsevier, vol. 95(5), pages 416-427.
    24. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    25. Catherine Eckel, 2005. "Subsidizing Charitable Contributions: A Field Test Comparing Matching and Rebate Subsidies," Working Papers 2098, The Field Experiments Website.
    Full references (including those not matched with items on IDEAS)

    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. Huck, Steffen & Rasul, Imran, 2011. "Matched fundraising: Evidence from a natural field experiment," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 351-362, June.
    2. Krasteva, Silvana & Saboury, Piruz, 2021. "Informative fundraising: The signaling value of seed money and matching gifts," Journal of Public Economics, Elsevier, vol. 203(C).
    3. Drouvelis, Michalis & Marx, Benjamin M., 2022. "Can charitable appeals identify and exploit belief heterogeneity?," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 631-649.
    4. Michalis Drouvelis & Benjamin M. Marx, 2021. "Dimensions of donation preferences: the structure of peer and income effects," Experimental Economics, Springer;Economic Science Association, vol. 24(1), pages 274-302, March.
    5. Feine, Gregor & Groh, Elke D. & von Loessl, Victor & Wetzel, Heike, 2023. "The double dividend of social information in charitable giving: Evidence from a framed field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 103(C).
    6. Saboury, Piruz & Krasteva, Silvana & Palma, Marco A., 2022. "The effect of seed money and matching gifts in fundraising: A lab experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 425-453.
    7. Indranil Goswami & Indranil Goswami, 2020. "No Substitute for the Real Thing: The Importance of In-Context Field Experiments in Fundraising," Marketing Science, INFORMS, vol. 39(6), pages 1052-1070, November.
    8. Huck, Steffen & Rasul, Imran & Shephard, Andrew, 2012. "Comparing charitable fundraising schemes: Evidence from a field experiment and a structural model," Discussion Papers, Research Unit: Economics of Change SP II 2012-303, WZB Berlin Social Science Center.
    9. Indranil Goswami & Oleg Urminsky, 2018. "No Substitute for the Real Thing: The Importance of In-Context Field Experiments In Fundraising," Natural Field Experiments 00660, The Field Experiments Website.
    10. Karlan, Dean & List, John A., 2020. "How can Bill and Melinda Gates increase other people's donations to fund public goods?," Journal of Public Economics, Elsevier, vol. 191(C).
    11. Levin, Tova & Levitt, Steven D. & List, John A., 2023. "A Glimpse into the world of high capacity givers: Experimental evidence from a university capital campaign," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 644-658.
    12. Maja Adena & Rustamdjan Hakimov & Steffen Huck, 2024. "Charitable Giving by the Poor: A Field Experiment in Kyrgyzstan," Management Science, INFORMS, vol. 70(1), pages 633-646, January.
    13. Butera, Luigi & Horn, Jeffrey, 2020. "“Give less but give smart”: Experimental evidence on the effects of public information about quality on giving," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 59-76.
    14. Catherine C. Eckel & Hanna G. Hoover & Erin L. Krupka & Nishita Sinha & Rick K. Wilson, 2023. "Using social norms to explain giving behavior," Experimental Economics, Springer;Economic Science Association, vol. 26(5), pages 1115-1141, November.
    15. Castillo, Marco & Petrie, Ragan, 2020. "Optimal Incentives to Give," IZA Discussion Papers 13321, Institute of Labor Economics (IZA).
    16. Gallier, Carlo & Goeschl, Timo & Kesternich, Martin & Lohse, Johannes & Reif, Christiane & Römer, Daniel, 2023. "Inter-charity competition under spatial differentiation: Sorting, crowding, and spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 457-468.
    17. 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.
    18. Simon Gaechter, 2006. "Conditional cooperation: Behavioral regularities from the lab and the field and their policy implications," Discussion Papers 2006-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    19. Adena, Maja & Huck, Steffen, 2022. "Personalized fundraising: A field experiment on threshold matching of donations," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1-20.
    20. repec:pri:cepsud:226shephard is not listed on IDEAS
    21. Adena, Maja, 2021. "How can we improve tax incentives for charitable giving? Lessons from field experiments in fundraising," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 344-353.

    More about this item

    Keywords

    charitable giving; field experiment; structural estimation;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:wzbeoc:spii2012303r. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/owwzbde.html .

    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.