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

33 Pages Posted: 23 May 2006  

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

Multiple version iconThere are 2 versions of this paper

Date Written: April 10, 2006

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.

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

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

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

Dean S. Karlan (Contact Author)

Yale University ( email )

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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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John A. List

University of Chicago - Department of Economics ( email )

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Chicago, IL 60637
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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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IZA Institute of Labor Economics

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