Do Charities Get More When They Ask More Often? Evidence from a Unique Field Experiment

35 Pages Posted: 17 May 2010

See all articles by Bas Donkers

Bas Donkers

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM); Tinbergen Institute

M. van Diepen

Erasmus University Rotterdam (EUR)

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics

Date Written: July 2010 4,

Abstract

Charitable organizations send out large volumes of direct mailings, soliciting for money in support of many good causes. Without any request, donations are rarely made, and it is well known that each request for money by a charity likely generates at least some revenues. Whether a single request from a charity increases the total amount donated by an individual is however unknown. Indeed, a response to one request can hurt responses to others. The net effect is therefore not easily observable, certainly not when multiple charities address the same individuals. In this paper we alleviate these observational difficulties by carrying out a field experiment in which five large charities cooperate. With the unique data that we collect, we study the impact of sending more requests on total donations. The results indicate that there is a negative competitive effect on requests from other charities, but this effect dies out rapidly. Soon after the mailing has been sent, it is only a strong cannibalization of the charity’s own revenues that prevails. This empirical finding suggests the important conclusion that not much coordination across charities is needed to increase revenues. We also demonstrate that charities need sophisticated evaluation tools that do not ignore the effects of cannibalization.

Keywords: fundraising, competition, direct mailing, field experiment

JEL Classification: C44, M31, M

Suggested Citation

Donkers, Bas and Van Diepen, Merel and Franses, Philip Hans, Do Charities Get More When They Ask More Often? Evidence from a Unique Field Experiment (July 2010 4,). ERIM Report Series Reference No. ERS-2010-015-MKT, Available at SSRN: https://ssrn.com/abstract=1606084

Bas Donkers (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

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Erasmus Research Institute of Management (ERIM) ( email )

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HOME PAGE: http://https://www.eur.nl/en/people/bas-donkers

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Merel Van Diepen

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1278 (Phone)
+31 10 408 9162 (Fax)

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