How Can Bill and Melinda Gates Increase Other People's Donations to Fund Public Goods?

Abstract

We conducted two matching grant experiments with an international development charity. The primary experiment finds that a matching grant from the Bill and Melinda Gates Foundation raises more funds than a matching grant from an anonymous donor. The effect persists and is strongest for donors who previously gave to other poverty-oriented charities. Combining these insights with survey results, we conclude that our matching gift primarily works through a quality signal mechanism. Overall, the results help to clarify why people give to charity, what models help to describe those motivations, and how practitioners can leverage economics to increase their fundraising potential.

Keywords: public goods, charitable fundraising, asymmetric information, matching grant

JEL Classification: D12, D71, D82, H41, O12