Avoiding Overhead Aversion In Charity

Gneezy, U.; Keenan, E. A.; Gneezy, A., (2014). Avoiding Overhead Aversion In Charity. Science, 346, 6209, 632–635.

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Type of evidence: Field-exp-charity

Related tools: Pre-cover overhead costs

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Charity target: USA - Children, Health - Poor countries

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Paper summary

++++Gneezy, Uri, Elizabeth A. Keenan, and Ayelet Gneezy. ““Avoiding overhead aversion in charity.”” Science 346.6209 (2014): 632-635.|

  • ““we test whether designating early large gifts to cover overhead costs increases donors’ willingness to contribute to a charity””
    • It ““should not matter””
  • People might see it as a sign of efficiency and honesty, or it might give them a greater feeling of impact

Lab experiment: two charities: (i) Kids Korps USA, and (ii) charity: water;

  • each participant could choose which got $100 if their decision was randomly chosen
  • They varied how much of the $100 went to the charity, and whether this 'overhead' was covered by a third party

DR: Does their lab experiment depict the relevant sort of 'overhead aversion'?

Field experiment, education charity, request letter to 40,000 US households, wants to fund as many $20k projects as possible (in USA). Asked to give $ 20/50/100

  • SEED: ““A private donor who believes in the importance of the project has given this campaign seed money in the amount of $10,000.””
  • MATCH: “”… The matching grant will match every dollar given by donors like you with a dollar, up to a total of $20,000
  • OVERHEAD: “” … $10,000 to cover all the overhead costs associated with raising the needed donations…“”

Results

  • Share donating: Overhead (8.5%) > *** Seed >= Match > Control (3.4%)
  • Amount raised: Overhead ($2.31) > ** Seed, Match > *** Control ($0.80)


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This paper has been added by David Reinstein

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