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

51 Pages Posted: 17 Sep 2013

See all articles by Steffen Huck

Steffen Huck

University College London - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Imran Rasul

University College London - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Andrew Shephard

University of Pennsylvania

Date Written: September 2013

Abstract

We present evidence from a natural field experiment and structural model designed to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera, we mailed 25,000 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) how individual donations would be matched using the lead donation, using either linear, non-linear and fixed-gift matching schemes. We develop and estimate a structural model that simultaneously estimates individual responses on the extensive and intensive margins of giving, and then utilize the structural model to predict giving behavior in counterfactual fundraising schemes. We find that charitable donations are maximized by simply announcing the lead donation rather than using it to match the donations of others in some way. If lead donors insist their gifts must be matched in some way, we find the fundraiser is best off announcing the existence of a lead donor and using a non-convex scheme to match the lead donation with individual donations. We conclude by providing evidence from a follow-up natural field experiment designed to probe further the question why lead donors are so effective in inducing others to give.

Keywords: charitable giving, field experiment, structural estimation

JEL Classification: C93, D12, D64

Suggested Citation

Huck, Steffen and Rasul, Imran and Shephard, Andrew, Comparing Charitable Fundraising Schemes: Evidence from a Natural Field Experiment and a Structural Model (September 2013). CEPR Discussion Paper No. DP9648, Available at SSRN: https://ssrn.com/abstract=2326512

Steffen Huck (Contact Author)

University College London - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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IZA Institute of Labor Economics

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Imran Rasul

University College London - Department of Economics ( email )

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London WC1E 6BT, WC1E 6BT
United Kingdom
+44 20 7679 5853 (Phone)
+44 20 7916 2775 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Andrew Shephard

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

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