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Journal of Public Economics j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / j p u b e
Small matches and charitable giving: Evidence from a natural ﬁeld experiment☆
Dean Karlan a,b,f, John A. List b,c,d,⁎, Eldar Shaﬁr b,e a Yale University, Department of Economics, 27 Hillhouse Avenue, New Haven CT 06511, United States
Innovations for Poverty Action c The University of Chicago, Department of Economics, 1126 East 59th Street, Chicago, IL 60637, United States d NBER e Princeton University, Department of Psychology and Woodrow Wilson School, Princeton, NJ 08540, United States f Massachusetts Institute of Technology, Jameel Poverty Action Lab b a r t i c l e
i n f o
Received 7 October 2009
Received in revised form 15 November 2010
Accepted 19 November 2010
Available online 28 November 2010
Warm and cold list donors
a b s t r a c t
To further our understanding of the economics of charity, we conducted a natural ﬁeld experiment. Making use of two direct mail solicitations sent to nearly 20,000 prior donors to a charity, we tested the effectiveness of $1:$1 and $1:$3 matching grants on charitable giving. We ﬁnd only weak evidence that either of the matches work; in fact, for the full sample, the match only increased giving after the match deadline expired.
Yet, the aggregation masks important heterogeneities: those donors who are actively supporting the organization tend to be positively inﬂuenced whereas lapsed givers are either not affected or adversely affected. Furthermore, some presentations of the match can do harm, e.g., when an example amount given is high ($75) and the match ratio is below $1:$1. Overall, the results help clarify what might cause people to give and provide further evidence that larger match ratios are not necessarily superior to smaller match ratios.
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The charitable marketplace represents an interesting set of three major agents (Andreoni, 2007). First, are the donors, who provide the resources for private organizations to produce public goods. A rich theoretical and empirical literature has developed in the last few decades that explores what motivates individual giving (see
Andreoni, 2006, for an excellent overview). Second, is the government, which affects decisions on the margin through its use of the tax code, and the level of transfers it sends to charitable operations.1 The ﬁnal set of actors is charitable organizations, which develop strategies intended to attract resources to produce public goods. In the U.S., this ﬁnal set of actors has been reasonably successful, as charitable monetary gifts have been 2% or more of GDP since 1998.
Even though the stakes in understanding the charitable market linkages are clearly quite high, until recently economists have largely ignored the link between individuals and charitable fundraisers. A set of recent natural ﬁeld experiments has begun to lend insights to this area
(see the overview in List, forthcoming). One early natural ﬁeld experiment
☆ Thanks to the seminar participants at the Middlebury Conference on Philanthropy,
⁎ Corresponding author. The University of Chicago, Department of Economics, 1126
East 59th Street, Chicago, IL 60637, United States.
E-mail addresses: email@example.com (D. Karlan), firstname.lastname@example.org (J.A. List), shaﬁr@princeton.edu (E. Shaﬁr).
Feldstein (1975), Clotfelter (1985), Randolph (1995), and Auten et al. (2002) are examples of empirical work that examines price effects via rebate mechanisms (such as changes in tax deductions) through which charitable contributions can be used to reduce one's tax burden. Andreoni and Payne (forthcoming) is a recent empirical contribution that explores how fundraisers respond to government