The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign

List, John A.; Lucking-Reiley, David

doi:10.1086/324392

Cited by 434 publications

(280 citation statements)

References 19 publications

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“…The U.S. Primaries sequentially aggregate a number of different individual choices, not only those by voters but also campaign donors and political leaders who decide over time which candidate to endorse. Similarly, contributions for public goods are often raised gradually; for example, leaders typically decide how to direct their seed money while anticipating the choices of followers (List and Lucking-Reiley, 2002;Andreoni, 2006). Some settings that are not about collective choice per se also share the feature that agents who make choices over time may benefit from other agents making good decisions: for example, when adopting new technologies, farmers in developing countries may care about others' choices because of risk-sharing arrangements in their community.…”

Section: Introductionmentioning

confidence: 99%

Herding with collective preferences

Ali

Kartik

2011

Econ Theory

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This paper studies a simple model of observational learning where agents care not only about the information of others but also about their actions. We show that despite complex strategic considerations that arise from forward-looking incentives, herd behavior can arise in equilibrium. The model encompasses applications such as sequential elections, public good contributions, and leadership charitable giving.

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Section: Introductionmentioning

confidence: 99%

Herding with collective preferences

Ali

Kartik

2011

Econ Theory

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“…Field experiments have been used to analyze a range of issues with respect to charitable giving; for example, the effect of lead donations (List and Lucking-Reiley, 2002), lotteries versus voluntary contributions (Landry, Lange, List, Price, and Rupp, 2006), whether receiving a large number of requests irritates potential donors (Van Diepen, Donkers, and Franses, 2009), reasons as to why donors support multiple charities (Null, 2011;de Oliveira, Croson, and Eckel, 2011) and the correlation between giving and socio-demographic characteristics (Bekkers, 2007). There are also two field experiments on the effect of transaction costs in the context of charitable giving: Huck and Rasul (2010) and Meer and Rigbi (2013).…”

Section: Literature Reviewmentioning

confidence: 99%

Transaction Costs, the Opportunity Cost of Time and Inertia in Charitable Giving

Knowles

Servátka²

2013

SSRN Journal

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We conduct a laboratory experiment to analyze the effect transactions costs and inertia have on charitable giving. We conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high. Inertia could become a factor if people intend to give, but postpone making the payment until they have more time, and having postponed making the donation once, keep doing so. We find evidence of a transaction cost effect, with the size of this effect depending on the opportunity cost of time, but no statistically significant inertia effect.Keywords: Charitable giving; dictator game; transaction costs; opportunity cost of time;inertia. JEL Classifications: C91; D64 Acknowledgements: Earlier versions of the paper were presented at the New Zealand Association of Economists Conference (Wellington, June 2013), the Australia New Zealand Experimental Economics Workshop (Brisbane, August 2013), the Science of Philanthropy Initiative Conference (Chicago, October 2013), the North American Experimental Economics Association Conference (Santa Cruz, October 2013) and in the University of Otago Seminar Programme (Dunedin, September 2013). We are grateful to participants for the many helpful comments received. Financial support was provided by the School of Business at the University of Otago and the College of Business and Economics at the University of Canterbury. (Orman, 2004: attributed to T. Trueblood) Introduction.This is not actually a paper about fishing, but about giving money to charity. The above quote, however, sums up what this paper is about if "go fishing" is replaced with "donate".Just as going fishing can be put off to another day, so can donating money to charity. This paper analyzes whether people are subject to such inertia with respect to charitable giving. In particular we ask whether some people intend to give money to charity, but simply never get around to doing so? For example, someone may read an email asking for a donation and is inclined to donate, but as she is busy preparing for a meeting decides to wait until after the meeting to click on the link to the charity's website and enter her credit card details. It is then possible, that having delayed making the donation once, she will do so again, until the opportunity to donate has passed.Why do people postpone making their donations? Does the presence of transaction costs combined with a high opportunity cost of time at the moment of solicitation reduce donations? 1 Both questions have important policy implications as finding ways to reduce transaction costs, and the potential for inertia, could increase donations to charity.The three issues mentioned in the title of the current paper go hand in hand. We conjecture that inertia is likely to exist in the presence of transaction costs when two other conditions are satisfied simultaneously: (1) making a donation does not have to be made on the spot but can be postponed until later (which is usually the case with requests sent ...

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“…Previous experimental literature has addressed voluntary contributions to public goods (Andreoni, 1993;Cadsby et al, 2007;Chan et al, 2002;Croson and Marks 1998List and Lucking-Reiley, 2002;Jones and McKee, 2009;Rondeau et al, 1999;Rose et al, 2000;Walker et al, 2000). However, to the best of our knowledge there is no previous experimental study on different instruments for environmental fundraising in tourism destinations.…”

Section: Introductionmentioning

confidence: 99%

“…Some well accepted findings of this literature are: that the zero-contribution hypothesis is not validated (see Zelmer, 2003, for a meta-analysis of linear public goods), taxes can (at least partially) crowd-out voluntary donations (Andreoni, 1993;Chan et al, 2002), and public contributions complementing private donations (e.g. matching instruments or seed money) can increase the size or the number of donations (List and Lucking-Reiley, 2002).…”

Section: Introductionmentioning

confidence: 99%

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An Experimental Study for Environmental Fundraising in Majorca, Spain

López¹,

Blanco²,

Coleman³

2011

Experiments on Energy, the Environment, and Sustainability

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This paper tests the effectiveness of different institutions to fundraise for environmental projects at tourist destinations. We conduct a series of experiments with tourists visiting the Island of Majorca, Spain, and test the fundraising capacity of a voluntary donation scheme, two tax levels, and a matching instrument. Majorca is a major international tourism destination, but tourism activities continue to stress the natural environment making the destination less attractive. This is a common phenomenon in mature tourism destinations. In response, many destinations invest in projects to prevent environmental degradation or for environmental remediation. These projects are traditionally financed by means of public investment, with a consequent tax burden to residents. The most common alternative to fund environmental projects is shifting the tax burden to tourists through tourist-targeted taxation schemes. More recently, programs to gather voluntary donations from tourists have been implemented. In one treatment of our experiment, tourists are given the opportunity to make a voluntary donation to the local environmental organization involved in such projects. In high tax and low tax treatment, tourists are taxed some proportion of their initial endowment and then decide on their level of voluntary contributions from their remaining endowment. In a final treatment, the experimenters match, one-for-one, any voluntary donations. We test the crowding-out hypothesis of taxes over voluntary environmental donations and find imperfect crowding-out (from 60 to 65 percent for different tax levels). Finally, we explore potential crowding-in of matching instruments (widely used in non-tourism settings for fundraising campaigns), but do not find any support for the capacity of matching contributions to increase the level of donations. Because of imperfect crowding-out it may be reasonable to use voluntary donation programs and tourism taxes complementarily (instead of independently, as has been done in Majorca), to increase fundraising for environmental purposes.

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The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign

Cited by 434 publications

References 19 publications

Herding with collective preferences

Herding with collective preferences

Transaction Costs, the Opportunity Cost of Time and Inertia in Charitable Giving

An Experimental Study for Environmental Fundraising in Majorca, Spain

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