Do Charities Get More When They Ask More Often? Evidence From A Unique Field Experiment

Donkers, Bas; van Diepen, Merel; Franses, Philip Hans, (2017). Do Charities Get More When They Ask More Often? Evidence From A Unique Field Experiment. Journal Of Behavioral And Experimental Economics, 66, , 58–65.

Keywords: Fundraising, Competition, Direct mailing, Field exper

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Type of evidence: Field-exp-charity

Related tools: Charities collaborate/compete?

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Charity target: Various

Donor population: Netherlands,

Paper summary

- Access to databases of 5 largest charities in NL - Targeting 'extra mailings' to existing donors - all sent in one week (cf, donors to all 5 typically get 1 mailing every 2 weeks)

Results

*Direct:* each experimental mailing generates 1.81 Euro in revenues, on average, so the short-run impact of mailings is positive.

*Cannibalization, net:* Each mailing lowers future revenues by 1.21 Euros, representing a 62% loss of the initial gain …the net revenues of 0.69 Euro is still statistically significant.

* *Competition* Extensive margin: -0.36\% impact of a competitive mailing (cf predicted response rate of 13.39%) Combined margins: reduction of 0.10 Euros for an additional competitive mailing (cf 2.41 Euros baseline) - 10\% summed effect on all competitors *

Long run: 5 months

- Sending an extra mailing on top of the current mailing strategy reduces the total future donation with around €1.51

  1. Still positive effect in net of 1.81-1.51=0.30; significant?

- Competition - not significant (but wide std error $\rightarrow$ little power to detect

Discussion

Evidence for “cannibalization” of own mailings, some competitive effect on other charities in the short run; underpowered to detect long-run competitive effects

Evaluation

Donkers ea provides the most relevant evidence on this question - But limited to a particular set of donors to multiple causes - Low-impact shock (extra mailing) to existing donors - Do not connect direct and indirect effects of mailings - Do not report on 'how closeness of charities matters' - Lack of power to distinguish LR competitive effect


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Journal rating: 3

Citations: 2

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This paper has been added by David Reinstein

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