Matched Fundraising: Evidence from a Natural Field Experiment
University College London - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)
University College London - Department of Economics; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)
CEPR Discussion Paper No. DP8075
We present evidence from a natural field experiment designed to shed light on the efficacy of fundraising schemes in which donations are matched by a lead donor. In conjunction with the Bavarian State Opera House, we mailed 14,000 regular opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to treatments designed to explore behavioral responses to linear matching schemes, as well as the mere existence of a substantial lead donor. We use the exogenous variation in match rates across treatments to estimate the price elasticities of charitable giving. We find that straight linear matching schemes raise the total donations received including the match value, but partially crowd out the actual donations given excluding the match. If charitable organizations can use lead gifts as they wish, our results show they maximize donations given by simply announcing the presence of a lead gift. We contrast our price elasticity estimates with those based on changes in rules regarding tax deductions for charitable giving, as well as from the nascent literature using large-scale natural field experiments on giving.
Number of Pages in PDF File: 32
Keywords: charitable giving, matched fundraising, natural field experiment
JEL Classification: C93, D12, D64working papers series
Date posted: November 22, 2010
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