Title

Comparing Charitable Fundraising Schemes: Evidence from a Field Experiment and a Structural Model

Author(s)

Steffen Huck Steffen Huck (University College London)

Imran Rasul Imran Rasul (University College London)

Andrew Shephard Andrew Shephard (Princeton University)

Abstract

We present evidence from a natural field experiment designed to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera House, we mailed 25,000 regular opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to six treatments designed to explore behavioral responses to fundraising schemes varying in two dimensions: (i) the presence of a lead donor; (ii) whether and how individual donations would be matched using the lead donation. We provide reduced form evidence from the field experiment on the causal impact of each fundraising scheme on the extensive and intensive margins of giving. We then develop and estimate a structural model of giving behavior that simultaneously estimates individual responses on both margins. We utilize the structural model to predict giving behavior in counterfactual fundraising schemes. The evidence suggests the optimal fundraising scheme is one in which the charitable organization merely announces the existence of a significant and anonymous lead donor, and does not use the lead donation to match donations in any way, be it through linear matching, non-linear matching, threshold matching, or some combination of the three. We conclude by discussing evidence from a follow-up field experiment designed to probe further the question why lead donors are effective.

Creation Date

2012-03

Section URL ID

CEPS

Paper Number

226

URL

https://gceps.princeton.edu/wp-content/uploads/2017/01/226shephard.pdf

File Function

Jel

C93, D12, D64

Keyword(s)

charitable giving, field experiment, structural estimation, Germany

Suppress

false

Series

3