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Does One Charitable Contribution Come at the Expense of Another?
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This paper defines, discusses, and measures “expenditure substitution†in charitable giving. Motivated by a model of conditional demand, I consider the extent to which a “temporary shock†that increases an individual's donation to one cause by a particular amount displaces her gifts to other charitable causes. I use the 2001-2007 waves of the PSID/COPPS, the first data set of its kind, to identify this. Households that give more to one type of charity tend to give more to others. However, many of the correlations between the residuals after fixed-effects regressions are negative and significant, particularly for larger donors and for certain categories of charitable giving. Given plausible econometric assumptions, the negative correlations are strong evidence of expenditure substitution. Overall, these results suggest heterogeneous motivations for giving: small givers may be mainly driven by temporary shocks and personal appeals while larger givers may have concave multi-charity warm-glow preferences.
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... Most purchases were made by women of age 35-44. Surprisingly, this campaign did not deliver as expected, although according to Reinstein (2011) when a person donates to one type of charity, there is an increased likelihood of donating to other types of charity as well. This campaign was interrupted relatively quickly due to its low performance. ...
... Focusing on the coordination dilemma rather than the size of contributions, our paper complements a host of recent studies that inquire whether competing charities are substitute for each other, this thereby involving no increase in overall donations (Reinstein, 2011;Meer, 2017;Krieg and Samek, 2017;Filiz-Ozbay and Uler, 2019;Schmitz, 2021). Furthermore, we build on the long-standing literature on the threshold public goods game (see Croson and Marks (2000) for a meta-analysis), which is a typical tool to frame fundraising (Andreoni, 1998;Rondeau and List, 2008;Cason and Zubrickas, 2019;Marini et al., 2020), as well as on a related body of research that studies other real-world settings characterized by multiple public goods (Blackwell and McKee, 2003;Bernasconi et al., 2009;Buchan et al., 2011;Catola et al., 2020). ...
This paper is a single-project meta-analysis of four experiments that first model charitable giving as individual contributions to a multiplicity of competing threshold public goods. Given the centrality of the coordination dilemma as the number of recipients increases, we pool 15,936 observations at the individual level for the purpose of identifying the most effective focal points, their mechanics, and their implications for donors’ wealth. We find that competition between public goods implies massive coordination problems that originate from fewer contributions and result in lower profits. In this setting, the most powerful coordination device turns out to be the existence of a single contribution option that stands out on its merits. We also observe an inverted U-shaped trend in the successful provision of public goods, offering evidence for experience as a focal point peculiar to the multiple-public-good framework. The effective focal points do not leverage greater contributions to solve the coordination dilemma, yet they generate higher earnings. Finally, delegation proves to be a sound device for reducing the risk of miscoordination as long as the delegate is formally obliged to pass along a high enough percentage of the transferred resources. We discuss possible implications of our findings.
... Focusing on the coordination dilemma rather than the size of contributions, our paper complements a host of recent studies that inquire whether competing charities are substitute for each other, this thereby involving no increase in overall donations (Reinstein, 2011;Meer, 2017;Krieg and Samek, 2017;Filiz-Ozbay and Uler, 2019;Schmitz, 2021). Furthermore, we build on the long-standing literature on the threshold public goods game (see Croson and Marks (2000) for a meta-analysis), which is a typical tool to frame fundraising (Andreoni, 1998;Rondeau and List, 2008;Cason and Zubrickas, 2019;Marini et al., 2020), as well as on a related body of research that studies other real-world settings characterized by multiple public goods (Blackwell and McKee, 2003;Bernasconi et al., 2009;Buchan et al., 2011;Catola et al., 2020). ...
We explore the link between online salience and charitable donations. Using a unique dataset on phone text donations that includes detailed information on the timing of cash gifts to charities, we link donations to time variation in online searches for words that appear in those charities’ mission statements. The results suggest that an increase in the online salience of the activities pursued by different charities affects the number and volume of donations made to those charities and to charities that pursue different goals. We uncover evidence of positive “own-salience” effects and negative “cross-salience” effects on donations.
Fundraising interventions may lift donations and/or shift their composition and timing. Using data rich in both the charity space and time dimensions, we find that major fundraising appeals lift donations to the appeal charity and that this increase is not offset by lower donations later in time. Strikingly, major appeals also forward-shift donations to other (nonappeal) charities that are offset by lower donations later. To understand these response patterns, we introduce a two-period, two-charity “ lift-shift” model. The model indicates that the observed response patterns are possible only if warm glow is substitutable, both intertemporally and between charities. (JEL D64, H12, H41, L31, Q54)
The issue of why individuals choose to support charity has been the focus of considerable research in the disciplines of economics, psychology, social psychology, sociology, anthropology and more recently, management and marketing. This paper draws together extant work, developing a content model of giving behavior that fundraisers may use to inform their professional practice. A number of specific propositions are developed from the literature to assist in this goal. The paper provides summary tables of existing empirical studies categorized by the dimensions of the model, explores ambiguity in research findings, and concludes by highlighting opportunities for further research
Copyright © 2007 John Wiley & Sons, Ltd.
Considerable empirical research exists on donations in the US and their determinants. By contrast, less is known for the determinants of countries with an extensive welfare state. We address this deficiency by studying one of the possible drivers of charitable giving in Germany, a country with a highly developed welfare state. We take a close look at a special feature of the German income tax system: the church tax which is obligatory for people belonging to the Catholic or Protestant Church. It is an open question whether people regard church tax payments as a substitute for charitable contributions or not. We apply various random effects estimation techniques and first, we check whether paying church tax affects the decision to donate at all by estimating a probit model. Second, we examine in how far the sum of individual church tax payments affects the amount of individual charitable contributions. The use of tax return data allows controlling for further variables which have been shown to affect charitable contributions. Our results show that religious people are more likely to donate at all, but their amount of contributions is negatively affected by church tax payments.
Job Market Paper This paper investigates the factors that influence an individual's decision to make voluntary contributions to a public good, focusing on the role of social influences. Measuring social influences is challenging, due to several factors. Group selection may be based on unobservable tastes, there may be unobservable shocks that affect all group members, and the behavior of all group members is determined simultaneously. Proprietary data from the workplace giving campaign of a large national company are used. These data contain detailed information, which can be used to overcome the difficulties often associated with measuring social influences. This paper formulates the problem of measuring social influences as one of estimating the relationship between individual behavior and the behavior of peers by selecting appropriate instruments for group behavior. The results suggest that individual giving behavior is affected by social influences, and that social influences are stronger within salary quartiles and, in some situations, within genders.
The 1994 Independent Sector Survey of Giving and Volunteering conducted by the Gallup Organization was used to study the propensities with which people are solicited for money or time as well as the probabilities that people will volunteer time or donate money or property, given they have been solicited or not solicited, utilizing a two-stage probit analysis. Forty-five percent of respondents were asked by philanthropic organizations to volunteer time in 1994. Of those, 80% did volunteer. Some 78% of respondents were asked to donate money or property in 1994. Of those, 85% donated some money or property. Human, social, and cultural capital explained those who were solicited to volunteer. The same variables plus income variables determined whom to be solicited for donating money or property. Human, social, and cultural capital and income variables accounted for more variation in the probabilities to volunteer or donate, given respondents were not asked to contribute, than the probabilities to volunteer or donate, given respondents were asked to contribute.
On the whole the evidence lends support to the hypothesis that social pressure affects the level of charitable contributions. We find, however, that the form of the pressure is an important determinant of the size of health contributions. Personal forms of solicitation appear to increase contributions, relative to impersonal forms such as media advertisements and mail campaigns. Within the class of personal solicitations, we find that pressure to give which is exerted by friends is more effective than requrests by strangers. Limited evidence was also found that some workplace relationships result in more effective fund-raising when compared to solicitations by strangers.