Investigations Into Charitable Fundraising

Charitable giving in the U.S. totaled more than $300 billion in 2009, amounting to about 2% of GDP.These organizations depend on fundraising activities to generate donations from individuals who provide three-quarters of the funding for charitable organizations.Despite the size and scope of these operations, practical fundraising still relies heavily on rules-of-thumb and individual experience to design and run campaigns.These works aim to expand the understanding of fundraising through empirical and theoretical analysis.Leadership giving is the first fundraising practice explored.Leadership gifts are funds collected privately by a charity prior to announcing the campaign and accepting donations from the public.``Seeds to Succeed' examines a theoretical model for leadership giving first put forth in Andreoni (1998).We implement his model in the laboratory and find that when fixed-costs are high leadership gifts can greatly increase the chances a project producing benefits for the public.Intriguingly, with low fixed-costs leadership giving can actually have a small negative effect on subsequent donations.The second chapter, ``Provision Point Mechanisms and the Over-provision of Public Goods', examines the use of contribution refunds by fundraisers.That rather simple tool of guarenteeing refunds theorectically provides fundraisiers the ability to extract a large amount of contributions.The result is that the expected outcome of the campaign is the collection of inefficiently large contributions.The predicted over-provision occurs in 82\% of the time in our laboratory environment.The final chapter, ``Fundraising Goals', looks at the role of announcements at the start of campaigns.We theorize that announcements improve contributions by reducing donor's uncertainty about the project.Large improvements are possible with up to a 73% increase in contributions and a large increase in the donor base.Experimental data supports the prediction that announced goals increase contributions.Reducing uncertainty did not have the effect of further increasing contributions but led to greater coordination of contributions around the goal.The improved coordination significantly increases donor welfare under an uncertainty reduction.