The Effect of Effectiveness: Donor Response to Aid Effectiveness in a Direct Mail Fundraising Experiment

26 Pages Posted: 7 Apr 2014 Last revised: 30 Jul 2015

Dean S. Karlan

Yale University; Innovations for Poverty Action; Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Daniel H. Wood

Federal Trade Commission

Multiple version iconThere are 3 versions of this paper

Date Written: June 2015

Abstract

We test how donors respond to new information about a charity’s effectiveness. Freedom from Hunger implemented a test of its direct marketing solicitations, varying letters by whether they include a discussion of their program’s impact as measured by scientific research. The base script, used for both treatment and control, included a standard qualitative story about an individual beneficiary. Adding scientific impact information has no effect on average likelihood of giving or average gift amount. However, we find important heterogeneity: large prior donors both are more likely to give and also give more, whereas small prior donors are less likely to give. This pattern is consistent with two different types of donors: warm glow donors who respond negatively to analytical effectiveness information, and altruism donors who respond positively to such information.

Keywords: aid effectiveness, charitable fundraising, warm glow, pure altruism

JEL Classification: D64, H41, L31, O12

Suggested Citation

Karlan, Dean S. and Wood, Daniel H., The Effect of Effectiveness: Donor Response to Aid Effectiveness in a Direct Mail Fundraising Experiment (June 2015). Yale University Economic Growth Center Discussion Paper No. 1038; Yale Economics Department Working Paper No. 130. Available at SSRN: https://ssrn.com/abstract=2421943 or http://dx.doi.org/10.2139/ssrn.2421943

Dean S. Karlan (Contact Author)

Yale University ( email )

Box 208269
New Haven, CT 06520-8269
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Innovations for Poverty Action ( email )

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Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR) ( email )

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Daniel H. Wood

Federal Trade Commission ( email )

600 Pennsylvania Ave NW
Washington, DC 20580
United States

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