How category reporting can improve fundraising

Abstract

Many fundraisers report donations using categories such as more than £ 1000, more than £ 10,000 etc. One naturally wonders how we should categorise donations and whether category reporting can raise more funds than simple uncategorised reporting. To shed light on these questions, we employ a signalling game framework in which both the donor's donation and his bene…ts of being in a higher category are determined endogenously. Our analysis suggests that categorised reporting can always improve fundraising. Indeed, we show that both a high and a low category threshold can increase donations. Categorised reporting, especially with a high threshold, can though also lead to the existence of a low donation equilibrium. Fundraisers may then have to choose between: a safer low threshold and a potentially more lucrative high threshold where they would also have to try to coordinate individuals on the desirable equilibrium.

Reputational concerns with altruistic providers

“…Moreover, their focus is on analyzing and comparing sources of crowding out that are very di¤erent from ours. Much closer to our work are the studies by Jeitschko and Normann (2012), and Cartwright and Patel (2013). These authors consider signals with continuous support and dichotomous types.…”

“…Jeitschko and Normann (2012), in an experimental game theory exercise, present a model that is close to ours but more restrictive. Cartwright and Patel (2013) present a model of fundraising and donations. However, they rule out the high-performance pooling equilibrium by means of the "Intuitive criterion" (Cho and Kreps, 1987), which leads them to focus on the so called "Riley Outcome" (Riley, 1979), which is a separating equilibrium by construction.…”

Redistribution Through Charity and Optimal Taxation When People Are Concerned with Social Status

“…Harbaugh (1998a, b) investigates the prestige motive for charitable giving and demonstrates that donations significantly increase when a charity switches from no-reporting of donations to exact-reporting. Results in the spirit of those two papers are also reported by Cartwright and Patel (2013). Similarly, in a series of lab experiments, Reinstein and Riener (2012) show that donors tend to donate more if their donations are reported than if they are anonymous.…”

Charity As Income Redistribution: A Model With Optimal Taxation, Status, and Social Stigma

“…We also follow a more recent strand of literature in assuming a prestige motive behind charitable giving, i.e., that charitable giving signals status (see, e.g., Glazer and Konrad, 1996;Harbaugh, 1998a;Cartwright and Patel, 2013). Empirical and experimental evidence demonstrates that donations are typically higher if they are observable than if they are not, and that the way in which they are reported also affects their size (e.g., Harbaugh, 1998b;Andreoni and Petrie, 2004;Alpizar et al, 2008).…”