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Small is beautiful: Experimental evidence of donors' preferences for charities

Author

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  • Borgloh, Sarah
  • Dannenberg, Astrid
  • Aretz, Bodo

Abstract

This paper studies the effect of information about a charity's size on individuals' donations to that charity. We conducted a framed field experiment with a non-student sample, in which subjects had the opportunity to donate for various charitable purposes. The results show that if subjects are to choose between large organizations with high annual revenues and small organizations with low revenues, they prefer the small organizations. We also provide insights why donors prefer the small organizations and discriminate between different theoretical approaches.

Suggested Citation

  • Borgloh, Sarah & Dannenberg, Astrid & Aretz, Bodo, 2010. "Small is beautiful: Experimental evidence of donors' preferences for charities," ZEW Discussion Papers 10-052, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:10052
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    Cited by:

    1. Jade Wong & Andreas Ortman, 2013. "Do Donors Care About the Price of Giving? A Review of the Evidence, with Some Theory to Organize It," Discussion Papers 2013-22, School of Economics, The University of New South Wales.
    2. Nadine Chlaß & Lata Gangadharan & Kristy Jones, 2015. "Charitable Giving and Intermediation," Monash Economics Working Papers 18-15, Monash University, Department of Economics.
    3. Jake Guth & David Munro, 2020. "Preferences for efficiency and redistribution: An experiment using charitable donations," Economics Bulletin, AccessEcon, vol. 40(3), pages 2217-2226.
    4. Metzger, Laura, 2015. "Making an impact? The importance of aid effectiveness for charitable giving. A laboratory experiment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112835, Verein für Socialpolitik / German Economic Association.
    5. Ivo Bischoff & Thomas Krauskopf, 2013. "Motives of pro-social behavior in individual versus collective decisions – a comparative experimental study," MAGKS Papers on Economics 201319, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Abhishek Bhati & Ruth K. Hansen, 2020. "A literature review of experimental studies in fundraising," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(1).
    7. Vonțea Andreea-Angela, 2018. "Determinants of the Individuals’ Willingness to Support Nonprofit Organizations – An Integrative Theoretical Perspective," International Conference on Marketing and Business Development Journal, The Bucharest University of Economic Studies, vol. 1(2), pages 84-91, December.
    8. Müller, Stephan & Rau, Holger A., 2015. "Risk-tolerant women donate more than men: Experimental evidence of dictator games," University of Göttingen Working Papers in Economics 264, University of Goettingen, Department of Economics.
    9. Daniel A Brent & Nathan W Chan, 2019. "Local Public Goods and the Crowding-out Hypothesis: Evidence from Civic Crowdfunding," Economics Bulletin, AccessEcon, vol. 39(3), pages 2142-2154.
    10. Hennessy, Jack & Mortimer, Duncan & Sweeney, Rohan & Woode, Maame Esi, 2023. "Donor versus recipient preferences for aid allocation: A systematic review of stated-preference studies," Social Science & Medicine, Elsevier, vol. 334(C).

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    Keywords

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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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