Incentives in fundraising: Evidence from a large scale natural field experiment in Finland

Abstract

The purpose of this study is to analyze the impact of various fundraising incentives and mechanisms on the donation behavior of Finnish households. This study is conducted as a Natural Field Experiment and measures the effect of challenge and “per-head” matching gifts on the total donations received from households. A challenge gift is an unconditional commitment by the donor, or a set of donors, to provide a given sum of money to a cause. A “per-head” matching gift is a conditional commitment by the leadership donors to donate a given sum, up to the maximum amount the leader donor is prepared to give, for every household that decides to contribute. Further, this study examines the effect of different “tick-the-box” amounts on the payment sheets of the mail-solicitations on total contributions made by the approached households.

The fundraising campaign conducted for the Cancer Society raised in total over 80,000 euros. I find that the higher ‘tick-the-box’ treatment of €20/€60/€100 compared to €10/€30/€50 induces significantly higher average contributions with no significant change in response rate. I also find that introducing a challenge gift or a fixed matching gift does not affect the average contributions or the response rate of households. However, if a challenge gift is introduced, the larger challenge gift leads to slightly higher average contributions with no significant change in response rate. Conversely, however, if a fixed matching gift is introduced, the smaller gift leads to slightly higher average contributions with no significant change in response rate.