Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment
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Open Access
- 1 December 2007
- journal article
- Published by American Economic Association in American Economic Review
- Vol. 97 (5), 1774-1793
- https://doi.org/10.1257/aer.97.5.1774
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)Keywords
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