Subsidizing Charitable Contributions: A Natural Field Experiment Comparing Matching and Rebate Subsidies

19 Pages Posted: 17 May 2011

See all articles by Catherine C. Eckel

Catherine C. Eckel

Texas A&M University

Philip J. Grossman

Monash University - Department of Economics

Date Written: September 1, 2008

Abstract

We report the results of a field experiment conducted in conjunction with a mailed fundraising campaign of a nonprofit organization. The experiment is designed to compare the response of donors to subsidies in the form of matching amounts or rebated amounts. Matching subsidies are used by many corporations as an employee benefit; the US federal tax system encourages giving using a rebate subsidy by making donations tax deductible. The design includes a control group and two levels of subsidy of each type. Our main result is that matching subsidies result in larger total donations to charities than rebate subsidies, a result that is qualitatively similar to the lab findings. The estimated price elasticities for the matching subsidy are very similar to (and insignificantly different from) the lab experiments, while rebate subsidies lead to lower contributions in the field than in the lab. Since rebates in the field involve substantial lags and additional complications as compared with the “instant rebates” of the lab, this latter difference is not unexpected. The matching results are an important step in validating lab estimates of responsiveness to subsidies of charitable giving.

Keywords: Field Experiment, Rebate Subsidy, Matching Subsidy, Charitable Giving

JEL Classification: C93, D64, H41, L3

Suggested Citation

Eckel, Catherine C. and Grossman, Philip J., Subsidizing Charitable Contributions: A Natural Field Experiment Comparing Matching and Rebate Subsidies (September 1, 2008). Experimental Economics, Vol. 11, No. 3, pp. 234-252, 2008, Available at SSRN: https://ssrn.com/abstract=1843396

Catherine C. Eckel (Contact Author)

Texas A&M University ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Philip J. Grossman

Monash University - Department of Economics ( email )

Wellington Road
Clayton, 3800
Australia
61399020052 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
54
Abstract Views
862
rank
413,018
PlumX Metrics