Increasing the rate of return on a gift challenge does little to boost giving

December 14, 2007

A little encouragement makes a big difference in people’s motivation to give to a charity, but upgrading the encouragement doesn’t automatically boost giving, according to a University of Chicago study on the impact of matching gifts.

The authors of the study, John List, Professor of Economics at the University of Chicago, and Dean Karlan, Assistant Professor of Economics at Yale, also found that the donor’s political environment had a big impact on their responses to political appeals.

In studying how people respond to matching gifts, the scholars discovered that whether the donation match was three dollars to one, two dollars to one, or one dollar to one, the rate and amount of giving was the same. The expectation that their donation would increase the total support to the organization was apparently enough to motivate donors, they found.

“Simply announcing the match money is available considerably increases the revenue per solicitation — by 19 percent,” List said. “In addition, the match offer significantly increases the probability that an individual donates — by 22 percent.”

Their study is reported in the paper, “Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment” published in the December issue of the American Economic Review. The study is part of an emerging field in economics that looks at the “demand,” or asking side of fundraising. Most other work on fundraising has looked at the “supply side,” which examines the impact, for instance, of tax changes on people’s motivation to give.

Their work on matching gifts disputes many commonly held beliefs among professional fundraisers whose hunches about what motivates people to give has led them to think that increasing the return on matches automatically increases giving.

List and Karlan were able to test that assumption with a field experiment conducted with the cooperation of a liberal non-profit organization that works on social and policy areas related to civil liberties. The group regularly sends out mailings requesting donations, and the two scholars were able to perform a field experiment with one of their mailings.

In their experiment, the organization sent a mailing to more than 50,000 people who had given to them in the past. A control group, making up about a third of the group, received a mailing with no offer of a match. The remainder was divided evenly into groups that received different matching offers, including one to one, two to one and three to one.

The mailing raised $13,566 from the control group, $10,431 from the one-to-one match, $10,439 from the two-to-one match, and $10,423 from the three-to-one match for a total of $45,860.

Because the group is politically oriented, the scholars also wanted to see if the political environment of the donors’ communities had an impact on giving. The people who lived in states where George Bush had won the 2004 presidential election apparently felt a greater threat to civil liberty causes because they gave more in response to the match, the scholars found.

Regardless of their age, education, or income, donors in red states were much more sensitive to the match than those in blue states, the study showed. List noted that “much more work is necessary before we understand the exact mechanism at work in red and blue states, but the results of our study are consistent with other research in sociology, psychology, and economics that also shows people have a tendency to rally to support causes when they feel they are under some threat.”

Source: University of Chicago

Explore further: Local development often at odds with regional land use plans, experts say

Related Stories

Alcatel-Lucent sets broadband speed record using copper

July 10, 2014

Might a research heavyweight open a new door to gigabit speed with the use of copper? Alcatel-Lucent on Wednesday said it set a new world record broadband speed of 10Gbps for transmission of data using traditional copper ...

Recommended for you

Chimpanzees shed light on origins of human walking

October 6, 2015

A research team led by Stony Brook University investigating human and chimpanzee locomotion have uncovered unexpected similarities in the way the two species use their upper body during two-legged walking. The results, reported ...

How much for that Nobel prize in the window?

October 3, 2015

No need to make peace in the Middle East, resolve one of science's great mysteries or pen a masterpiece: the easiest way to get yourself a Nobel prize may be to buy one.

The dark side of Nobel prizewinning research

October 4, 2015

Think of the Nobel prizes and you think of groundbreaking research bettering mankind, but the awards have also honoured some quite unhumanitarian inventions such as chemical weapons, DDT and lobotomies.

Who you gonna trust? How power affects our faith in others

October 6, 2015

One of the ongoing themes of the current presidential campaign is that Americans are becoming increasingly distrustful of those who walk the corridors of power – Exhibit A being the Republican presidential primary, in which ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.