Insuring Your Donation – An Experiment
33 Pages Posted: 5 Nov 2015 Last revised: 7 Jun 2016
Date Written: October 1, 2015
An increasing fraction of donations is channeled through donation intermediaries. These entities serve multiple purposes, one of which seems to be providing donors with greater certainty: that the donation reaches its intended goal, and that the donor may be sure to get a tax benefit. We interpret this function as insurance and test the option to insure donations in the lab. Our participants indeed have a positive willingness to pay for insurance against either risk. Yet the insurance option is only critical for their willingness to donate to a charity if the uncertainty affects the proper use of their donation.
Keywords: Insurance, charity, Donation, donation intermediary
JEL Classification: D64, H25, D03, H31, D12, G22, K34, L31
Suggested Citation: Suggested Citation