Charitable giving

Motives for giving

Project descriptions, links to papers and presentation slides

Effectiveness of different fundraising incentives on out-of-pocket donations

Optimal Incentives to Give

Charities often use dollar-for-dollar matching in their fundraising campaigns, but it is not clear if this is the most effective. We explore an alternative matching incentive that provides a fixed match if a donation meets or exceeds a threshold amount (e.g. "give at least $25 and the charity receives a $25 match"). A large-scale field experiment, involving 26 charities and over 112,000 individuals, is conducted with randomly-assigned threshold match amounts to potential donors. We find that out "best-guess" thresholds, informed by consultation with fundraising experts, were set too low to be effective at raising out-of-pocket donations. Thresholds should be set much higher, i.e. around $1,250. In a two-year, follow-up study, this high threshold scheme increased out-of-pocket donations for the charities by 5.4%. Our findings highlight the importance of testing different matching schemes and using experiments to explore out-of-sample alternatives that might be more effective.

Link to paper

Slides from Economic Science Association Global meetings plenary, "Do charities know what triggers donations?", 2021, (includes summary of this research and giving advice to charities)

Castillo, Marco and Ragan Petrie, 2021, "Optimal Incentives to Give," Working paper

Evidence of nuisance costs

Barriers to Giving

Donating to charity requires time, effort and attention. If the costs to give are perceived to be large, charities may lose out on donations as potential donors do not follow through a donation. We conduct a large-scale field experiment with over 17,200 individuals to show that these nuisance costs to giving are sizeable and impactful. Potential donor were offered a 5:1 fixed match if their donation met or exceeded a threshold (e.g. $1, $5 or $10). If individuals do not have nuisance costs to give, the probability of donating should decrease as the threshold increases. We find the opposite. Eliminating these nuisance costs would double donations in our sample.

Link to paper

Castillo, Marco, Ragan Petrie and Clarence Wardell, "Barriers to Charitable Giving," forthcoming, Journal of Public Economics

People will put social pressure when they can bundle it with a gift

Friends asking friends

Asking a friend to give to a cause we care about can be an effective way of raising money for charity. But, it is socially costly to ask. Are people willing to ask their friends? How does this willingness change when the ask comes with more or less social pressure, i.e. in front of an audience or in private, or when it is softened with a gift? We implement a large-scale field experiment, in partnership with an online global crowdfunding community and over 9,800 unique donors, to investigate the supply of social pressure in giving. People understand that asking a friend with more social pressure can be effective but also more costly. They are 50% less likely to ask when the ask comes with more social pressure, but 45% more likely to apply social pressure if they can bundle the ask with a gift.

Link to paper

Slides for "What motivates giving? Three things we have learned from field experiments with charity and foundation partners", 2019

Castillo, Marco, Ragan Petrie and Clarence Wardell, 2017, "Friends asking friends for charity: the importance of gifts and audience," Working paper.

Expecting a donation ask reduces click-through rates

Impact of a surprise donation ask

Individuals frequently exploit "flexibility" built into decision environments to give less. They use uncertainty to justify options benefiting themselves over others, they avoid information that may encourage them to give, and they avoid the ask itself. We use a field experiment embedded in an online voting contest for the best animal rescue organization ("Vote to give wags and dollars") to investigate whether individuals have a reluctance to give. Here, the ask is imminent but not necessarily expected. Flexibility is not provided, but individuals can use time to quickly find ways to decline prosocial asks. We find that the mere expectation of being asked to give decreases click-through rates to a charity's donation page by 22%. This suggests that being surprised by an ask can increase giving.

Link to paper

Exley, Christine and Ragan Petrie, 2018, "The impact of a surprise donation ask," Journal of Public Economics, 158, 152-167.

The importance of nuisance costs: those already logged into Facebook are more likely to ask and larger add-on donations increase asking a friend

Fundraising through online social networks

Two main reasons why people donate to charity are that they were asked and asked by someone they care about. Charitable organizations could benefit from peer-to-peer fundraising if they were able to persuade donors to do so for them. We implement a large-scale field experiment embedded in an online global crowdfunding community's web page and over 5,500 donors. Donors are asked to share information on their donation by posting on their Facebook wall or sending a private message, with and without incentives to do so via an add-on donation ($0, $1, $5). Nuisance costs are important. Those already logged into Facebook are more than twice as likely to ask, and larger add-on donations increase asking a friend by up to 12 percentage points.

Link to paper

Castillo, Marco, Ragan Petrie and Clarence Wardell, 2014, "Fundraising through online social networks: a field experiment on peer-to-peer solicitation," Journal of Public Economics, 114, 29-35.

Allowing for favor trading increases prosociality

Favor trading in public good provision

Favor trading is common. We do something nice for someone, and they do something nice in return. Several motives might underlie such behavior, including altruism, strategic motives and direct or indirect positive reciprocity. Using a laboratory experiment, we study the elements and dynamics of favor trading in the private provision of a public good. When individuals can reward those who were nice to them and withhold rewards from ungenerous group members, giving increases by 14%. This provides support for direct reciprocity, but we find no evidence for indirect reciprocity. Individuals do not reward generosity of others when they cannot get anything in return.

Link to paper

Jacobson, Sarah and Ragan Petrie, 2014, "Favor trading in public good provision," Experimental Economics, 17, 439-60.

Knowing one's contribution and identity will be shown to others increases prosociality to public goods

Giving without confidentiality

Why do experimental researchers want to preserve the confidentiality of their subjects? Presumably because we think that social effects are substantial. In real-world institutions, such as nonprofits, there is also the belief that revealing the identity and generosity of givers is important, i.e. by publishing names of givers or offering membership gifts. Perhaps the effects that researchers try to remove are the factors that real providers of public goods are manipulating to overcome free riding and improve efficiency. We find a 59% improvement in giving when subjects are unmasked and information on generosity is revealed.

Link to paper

Andreoni, James and Ragan Petrie, 2004, "Public goods experiments without confidentiality: a glimpse into fundraising," Journal of Public Economics, 88, 1605-23.