 Auctions for risk-averse non-profitsJeffrey Carpenter, Joshua Foster and Peter Hans Matthews Journal of Public Economics, 2025, vol. 249, issue C Abstract: Fundraising for non-profit organizations (NPOs) often involves converting in-kind donations into cash, commonly through charity auctions. However, little attention has been paid to the revenue distributions these mechanisms generate, an obvious concern for risk-averse NPOs deciding on a fundraising strategy. This paper introduces a theoretical framework that evaluates the first two moments of the revenue distributions accruing to ten auction formats under conditions that permit endogenous bidder participation. The resulting “revenue frontier” generated by these mechanisms reveals a robust and sizeable mean-variance tradeoff that NPOs should consider when selecting which mechanism(s) to employ. We test the model’s predictions for each auction format using both laboratory and field experiments and find evidence of a substantial (and similar) tradeoff in each setting. Additionally, we show how bidder participation can modulate an NPO’s risk exposure, conditional on the auction formats selected. These results offer important insights into how NPOs might optimize their fundraising strategies through methods of mechanism diversification. Keywords: Auctions; Charitable giving; Risk-return trade-off; Experiments (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:249:y:2025:i:c:s0047272725001501 DOI: 10.1016/j.jpubeco.2025.105452 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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