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

Dean Karlan and John List ()

American Economic Review, 2007, vol. 97, issue 5, pages 1774-1793

Abstract: We conducted a natural field experiment to further our understanding of the economics of charity. Using direct mail solicitations to over 50,000 prior donors of a nonprofit organization, we tested the effectiveness of a matching grant on charitable giving. We find that the match offer increases both the revenue per solicitation and the response rate. Larger match ratios (i.e., $3:$1 and $2:$1) relative to a smaller match ratio ($1:$1) had no additional impact, however. The results provide avenues for future empirical and theoretical work on charitable giving, cost-benefit analysis, and the private provision of public goods. (JEL D64, L31)

Date: 2007
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