Do Subsidies Increase Charitable Giving in the Long Run? Matching Donations in a Field Experiment

28 Pages Posted: 6 Feb 2007

See all articles by Stephan Meier

Stephan Meier

Federal Reserve Bank of Boston; IZA Institute of Labor Economics; Columbia Business School - Management

Date Written: December 2006

Abstract

Subsidizing charitable giving, for example, for victims of natural disasters, is very popular, not only with governments but also with private organizations. Many companies, for example, match their employees' charitable contributions, hoping that this will foster the willingness to contribute. However, systematic analyses of the effect of such a matching mechanism are still lacking. This paper tests the effect of matching charitable giving in a randomized field experiment in the short and the long run. The donations of a randomly selected group were matched by contributions from an anonymous donor. The results support the hypothesis that a matching mechanism increases contributions to a public good. However, in the periods after the experiment, when matching donations have been stopped, the contribution rate declines for the treatment group. The matching mechanism leads to a negative net effect on the participation rate. The field experiment therefore provides evidence suggesting that the willingness to contribute may be undermined by a matching mechanism in the long run.

Keywords: public goods, field experiment, matching mechanism, charitable giving

JEL Classification: C93, D64, H00

Suggested Citation

Meier, Stephan, Do Subsidies Increase Charitable Giving in the Long Run? Matching Donations in a Field Experiment (December 2006). FRB of Boston Working Paper No. 06-18, Available at SSRN: https://ssrn.com/abstract=960959 or http://dx.doi.org/10.2139/ssrn.960959

Stephan Meier (Contact Author)

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Columbia Business School - Management ( email )

3022 Broadway
New York, NY 10027
United States

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