Lift and shift: the effect of fundraising interventions in charity space and time

Abstract

Fundraising interventions may lift donations and/or shift their composition and timing, making it important to study their effect across charity space and time. We find that major fundraising appeals lift total donations, but surprisingly shift donations to other charities across time. To explain this, we develop a two-period model with two sources of warm glow that relates donation responses to underlying preference parameters. A dynamic framework, combined with rich data, provides opportunities to identify substitutability/complementarity in warm glow. The observed pattern is possible only if the two sources of warm glow are substitutes and warm glow is intertemporally substitutable.

Can Charitable Donations Compensate for a Reduction in Government Funding? The Role of Information

“…Information about government funding not only leads to substitution between organizations but also to the recruitment of new donors. New information or shocks in social needs may create a conversion effect and draw new donors into giving, as is shown in research on natural disasters (Scharf, Smith, and Ottoni‐Wilhelm ). Our results suggest that information about government funding has the potential to increase total fundraising income, which is an important insight for fundraisers.…”

“…Information about government funding not only leads to substitution between organizations but also to the recruitment of new donors. New information or shocks in social needs may create a conversion effect and draw new donors into giving, as is shown in research on natural disasters (Scharf, Smith, and Ottoni-Wilhelm 2017).…”

The donation response to natural disasters

“…The rationale for such accounts is that they facilitate tax-effective giving. ix Further tests reported in Scharf, Smith and Ottoni-Wilhelm (2017) confirm that this twenty-week period is sufficient to capture the dynamics associated with the appeals. There is no evidence of significant differences in donation (relative to baseline) after this time.…”

“…xiii An assumption in our analysis is that the baseline level of donations is not affected by the appeals. Scharf, Smith and Ottoni-Wilhelm (2017) show that, after each disaster appeal, donations return to the same baseline level. This supports the approach of modelling the effect of disaster appeals relative to a baseline appeal of giving.…”

“…vi Another example: Wiepking and van Leeuwen (2013) report evidence from Dutch data that the bivariate correlation between the number of people killed in and the amount donated-both in levels-is zero, but using the same data there is a strong correlation in the logarithms (Wiepking, personal communication). vii Scharf, Smith and Ottoni-Wilhelm (2017) provide more information on the data. CAF is a charity that provides financial services to the sector.…”