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Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment


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)

John A. List


University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

April 10, 2006

Yale Economic Applications and Policy Discussion Paper No. 13

Abstract:     
We conducted a natural field experiment to explore the effect of price changes on charitable contributions. To operationalize our tests, we examine whether an offer to match contributions to a non-profit organization changes the likelihood and amount that an individual donates. Direct mail solicitations were sent to over 50,000 prior donors. We find that the match offer increases both the revenue per solicitation and the probability that an individual donates. While comparisons of the match treatments and the control group consistently reveal this pattern, larger match ratios (i.e., $3:$1 and $2:$1) relative to smaller match ratios ($1:$1) had no additional impact. The results have clear implications for practitioners in the design of fundraising campaigns and provide avenues for future empirical and theoretical work on charitable giving. Further, the data provide an interesting test of important methods used in cost-benefit analysis.

Number of Pages in PDF File: 33

Keywords: charitable giving, fundraising, matching grants, altruism, contingent valuation method

JEL Classification: C93, D12, D72, H41, L31, M31


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Date posted: May 23, 2006  

Suggested Citation

Karlan, Dean S. and List, John A., Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment (April 10, 2006). Yale Economic Applications and Policy Discussion Paper No. 13. Available at SSRN: https://ssrn.com/abstract=903817

Contact Information

Dean S. Karlan (Contact Author)
Yale University ( email )
Box 208269
New Haven, CT 06520-8269
United States
Innovations for Poverty Action ( email )
1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States
Massachusetts Institute of Technology (MIT) - Abdul Latif Jameel Poverty Action Lab ( email )
E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
John A. List
University of Chicago - Department of Economics ( email )
1126 East 59th Street
Chicago, IL 60637
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072
Germany

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