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

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School of Business | Master's thesis
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Date
2011
Major/Subject
Rahoitus
Finance
Mcode
Degree programme
Language
en
Pages
73
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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.
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