Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty

37 Pages Posted: 28 Jul 2020 Last revised: 16 Aug 2020

See all articles by Benjamin Bittschi

Benjamin Bittschi

ZEW – Leibniz Centre for European Economic Research

Nadja Dwenger

Max Planck Institute for Tax Law and Public Finance

Johannes Rincke

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

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Date Written: July 2020

Abstract

We study donor loyalty in the context of church membership in Germany. Church members have to make substantial payments to their church but can opt out at any time. In a large-scale field experiment, we examine how private recognition for past payments affects church members' loyalty. We find that recognizing past payments in a letter significantly reduces opt-outs. This effect is driven by members in the bottom quartile of baseline payments to the church. Consistent with optimization frictions prior to the experiment, we observe a spike in opt-outs immediately after treatment for particularly costly memberships.

Keywords: Charitable Giving, donor loyalty, field experiment, Private recognition, recurring donors

JEL Classification: C93, D64

Suggested Citation

Bittschi, Benjamin and Dwenger, Nadja and Rincke, Johannes, Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty (July 2020). CEPR Discussion Paper No. DP14996, Available at SSRN: https://ssrn.com/abstract=3650110

Benjamin Bittschi (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Nadja Dwenger

Max Planck Institute for Tax Law and Public Finance ( email )

10117
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/public_economics/public_economics_people/dwenger_nadja.cfm

Johannes Rincke

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

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