Acquiring New Donors

Abstract

There is a rich literature on charitable giving which considers incentives applied to existing and potential donors. We contribute to current field experiment research in two important ways. First, we establish results for the impact of incentives on acquisition of new donors for organizations that do not have clearly partisan appeal, unlike much of the existing work. Second, we consider the influence of incentive gifts, which we term bonus trigger gifts. We find that promising that a bonus gift of $10 will be added to each donation significantly influences the acquisition and behavior of new donors. Although the $1 and $5 incentive conditions do not affect the response of potential donors, the promise of the $10 bonus increased the likelihood of acquiring a new donor and likely changed the distribution of the new donors’ gifts.

Keywords

donations nonprofit field experiment new donors incentives

Individuals in the United States donate nearly $300 billion annually to charitable organizations and purposes, and more than one quarter of the population volunteers each year (Bureau of Labor Statistics, 2012; Giving USA Foundation, 2011). Many nonprofits turn to consulting firms to advise them on the wide variety of ways to make the “ask” (that is ask for money). Economists have been working to understand what affects charitable behavior using a variety of research methods. Researchers have explored donor behavior using large data sets to test hypotheses, laboratory experiments to isolate which factors influence behavior, and field experiments to observe real-world responses to varying incentive conditions.

This study examines the impact of bonus trigger incentive gifts on new donor acquisition for a health-related nonprofit firm providing highly visible support to households in need. A bonus trigger gift is an additional gift, fixed in size, which is added to a donor’s gift regardless of the size of the donor’s gift. In our field experiment, we used bonus trigger gifts of $1, $5, or $10, as well as a control group with no bonus trigger gift. For example, with a $10 bonus trigger gift offer, if the donor gives $1, the nonprofit receives $11 ($1 from the donor, and $10 from an independent foundation). If the donor gives $100, the nonprofit receives $110. Thus, the bonus trigger gift is fixed relative to the size of the donor’s gift. The total cost to the foundation or individual funding the bonus trigger incentive program is based on the number of gifts received multiplied by the fixed amount of the bonus trigger gift.

We add to the literature in a few important ways. First, while numerous studies consider the effect of matching grants and seed grants, we consider another option available to nonprofit organizations. We use bonus trigger incentive gifts to prompt donations by potential donors. One benefit of using bonus trigger gifts instead of the more traditional match incentive is that they allow the independent foundation to spread their incentive across a large number of donors. In a traditional matching campaign, a few large gifts may exhaust the amount of matching funds available, whereas with a bonus trigger, the foundation’s gift only depends on the number of donations. Second, many if not most existing studies focus on nonprofit organizations that appeal to a particular demographic such as public radio, environmental preservation organizations, and universities. We instead offer evidence from an organization that arguably maintains appeal across demographic and political interests.

Background and Literature Review

Nonprofit organizations raise funds using a variety of methods. They evaluate the methods along two important dimensions. First, organizations are interested in which factors influence the probability of giving and the size of the gift for a particular campaign. Second, organizations must also consider the impact of the current campaign on future donor behavior of both the newly acquired and existing donor pools, as nonprofits typically have repeated interactions with these pools (see Landry, Lange, List, Price, & Rupp, 2006, for additional discourse). List’s (2011) detailed history of the economics of charity demonstrates the complexity of the question of what factors influence both the acquisition and behavior of new donors.

Andreoni’s (1989, 1990) seminal papers lay the groundwork for many theoretical and empirical papers that have followed. His theory of impure altruism formalizes the notion that giving can be influenced by both altruistic and warm-glow motives. Altruistic motives concentrate on the provision of the public good, whereas warm-glow motives allow for utility from the act of giving (and not the good provided).

In addition to these general motivations, the offered incentives also influence donor behavior. Within this existing empirical literature, most studies focus on matching schemes, rebate schemes, and seed (or lead donor) schemes. For evaluation of donor behavior, List (2008) promotes the use of field experiments over laboratory experiments by arguing that field experiments get much closer to the true decision process.

Matching grants match the donor’s gift at some level, usually on the order of $1 match per $2 gift, or smaller. Matching grants may be effective because they lower the price of giving, they serve as credibility signals, and they signal that now is the right time to give (Bekkers & Wiepking, 2011; Karlan & List, 2007). Some studies have found that matching programs are effective on the extensive margin by attracting new donors, not by increasing the size of donations from existing donors (Bekkers, 2005; Eckel & Grossman, 2008). However, Karlan and List (2007) find that matching offers increase both the revenue per solicitation as well as the propensity for giving. Karlan and List also report that relative to a $1:$1 match ratio, more generous matches of $3:$1 and $2:$1 do not further alter behavior. A potential drawback to matching gifts, Meier (2007) finds that although matching incentives increase giving in the current period, they may decrease future giving. His field experiment attached matching incentives to solicitations for student donations to an educational fund. The sensitivity of the findings may be due to factors such as how the match is communicated or the nature of the nonprofit organization. For example, Karlan and List (2007) use a nonprofit organization they describe as sufficiently politically motivated that “giving might be a form of political activism” (p. 1775), whereas Eckel and Grossman conduct their experiment as part of a fundraising effort by a National Public Radio affiliate.

Rebate campaigns promise to refund any gifts if the fundraising does not achieve a targeted dollar amount. Some earlier studies comparing the relative effectiveness of the incentive programs have found that match grants are more effective than rebate programs (Bekkers, 2005; Eckel & Grossman, 2008). Rondeau and List (2008) use a pool of existing donors to the Sierra Club to consider the impact of matching and challenge gifts. They find that challenge gifts, designed appropriately, increase giving, but that matching did not.

Seed grants do not match to donors’ gifts; rather, they add to the overall total fundraising goal. Advertising seed gifts or “leadership giving” in conjunction with fundraising drives may provide a signal to donors about the credibility of the charity (Andreoni, 2006). List and Lucking-Reiley (2002) test Andreoni’s theory using a university fundraising campaign and find that increasing seed money increases contributions.

One last (albeit less studied) strategy is the common “gift with donation” set up, wherein the nonprofit organizations give donors “token” gifts in appreciation of the donation. Examples include access to early ticket sales for a symphony or a coffee mug.

There is potential for priming effects in fundraising appeals—that is, potential donors may be primed to an “appropriate” gift through reference to other donors’ gifts or suggested donations. One field experiment using donors to local public radio stations finds that priming donors with relative social position changes the size of the gift (Croson & Shang, 2008). In one method of visual priming, Martin and Randal (2008) use a glass box to collect donations for an art gallery, and they find that when the box is staged with smaller currency, donors give less than when it is staged with larger-value currency. As an additional example of the role of social behavior in giving, attractiveness of the solicitor mattered in a door-to-door university fundraising experiment (Landry et al., 2006).

We provide new evidence that extends our understanding of how incentive mechanisms influence donor behavior.

Experiment Design

In coordination with a local charity office, we implemented a randomized control experiment in a mail campaign targeted at acquiring new donors.¹ The charity is a large-scale, nationally recognized, health-related organization whose work is viewed as nonpartisan. The charity normally uses purchased mailing lists to target potential new donors. In the fall of 2010, the charity obtained three mailing lists of individuals from commercial companies with a total of 14,023 addresses. We examine whether a potential new donor is more likely to contribute to a charity if their donation will also bring the charity an additional gift from a foundation, which we term the bonus trigger incentive. The additional (bonus) dollars are triggered by the individual donor gifts, thus providing greater incentive to give. In addition, we explore whether the amount of a donation varies conditional on the presence of an additional gift and the amount of the additional gift to the charity. An external nonprofit foundation provided funding for the bonus trigger gifts.

Within each of the three mailing lists, we randomly assigned one of four conditions to each mailing address. The control group received a two-page letter from the executive director of the charity with a story of an individual who had benefited from the work of this charity in the past. The three treatment groups each received an identical letter to the control group with one additional sentence bolded at the bottom of the first page stating, “In addition, the name of nonprofit foundation will add $x to your donation, so your gift can have an even greater impact!” For the three incentive groups, x was 1, 5, and 10, respectively. The charity then provided the results of the mailing, including for each household the amount of the donation, the mailing list that was the source of the household address, and whether the mailing address was in the control or one of the three treatment groups.

Theoretical Model

Using the existing literature on incentives for giving (with a focus on matching offers), we identify five key issues and apply them to the context of our bonus trigger gifts. Our offered incentive can affect the decision to give on two levels—the probability of giving and the amount of the gift conditional on giving. We explore differences between the control condition (with no bonus) and the bonus conditions. In addition, we compare outcomes across the different sizes of the bonus triggers. The following five categories capture the expected effects of the bonus trigger offer: changing the price of giving, signaling the quality of the organization, signaling the appropriate timing of gifts to the organization, introducing skepticism that the offer is a gimmick, and introducing social cues into the giving decision.

Incentives Alter the Price of Giving to an Organization

One mechanism that may influence giving behavior is the reduction in the price of giving caused by matching offers (Bekkers & Wiepking, 2011; Karlan & List, 2007). If we consider the idea of altruism as implying an optimal level of impact on the size of the public good, we can predict the effect of a bonus trigger incentive reflected through the altruistic motive. Because the bonus trigger gift makes the giver’s impact cheaper, the trigger should increase the probability an individual gives, and larger-value triggers should lead to even greater giving rates—similar to the effect found in several matching studies (Bekkers & Wiepking, 2011; Karlan & List, 2007). Although individuals are more likely to give, we expect that the average gift amount will diminish with larger trigger offers as the target giving level within the altruistic motive framework is now “cheaper” to accomplish. Therefore, the effect of the bonus trigger on the revenue per solicitation is ambiguous in this framework, as it depends on which effect dominates.

Incentives Indicate the Credibility and Trustworthiness of an Organization

In addition, matching offers help reduce uncertainty about the credibility of the organization (Bekkers & Wiepking, 2011; Karlan & List, 2007). In the same way, bonus trigger gifts signal to givers that the organization is respected enough to obtain the foundation’s funds, signaling credibility. We expect that a bonus trigger of any size will lead to an increase in the giving rate. Under this reasoning, total giving will increase.

Incentives Indicate the Appropriate Timing of Gifts to an Organization

Matching offers reduce uncertainty about the proper timing of gifts (Bekkers & Wiepking, 2011; Karlan & List, 2007). With the foundation’s support, the organization signals that now is the time to give. This mechanism predicts that a bonus trigger of any size will lead to an increase in the giving rate and an increase in the total dollar amount of donations. The average gift could increase or decrease, depending on the average size of the newly acquired gifts as a result of the trigger.

Incentives Are a Gimmick Used by Organizations

Other work proposes no relationship or a negative relationship between matching offers and giving on the premise that they are merely disingenuous marketing gimmicks (Karlan & List, 2007). In this scenario, potential donors view the matching donations as occurring whether or not a gift is made. If this is not distasteful to the potential donor, it will have no effect on the household giving behavior; however, if the household views this as disingenuous, a matching offer may decrease giving. A bonus trigger gift offer of any size should mimic the matching offer in this way leading to similar or lower giving rates and amounts than the control condition.

Incentives Introduce Social Cues, Context, and Norms Into the Decision to Give to an Organization

Earlier research highlights the fact that with large charities (Andreoni, 2006) or large donor pools (Ribar & Wilhelm, 2002)—both of which characterize the charity in this experiment—altruism diminishes in importance and warm-glow motives drive giving behavior (or “moral satisfaction”). The size of the donation sufficient to generate warm glow likely depends on the donor’s perceptions of social norms. Messick (1999) uses the idea of appropriateness to invoke the importance of social context in donation decisions. He posits that individuals’ expectations about what the appropriate action is in a given situation have a great deal of influence on behavior. Considering the implications of this model for our bonus trigger incentive, a bonus trigger gift may provide information to the potential donors about the appropriateness of the size of the gift.

The fixed match of the bonus trigger incentive may influence a household’s view of the social norm in a way similar to the effects of priming (Croson & Shang, 2008). We predict that the existence of a bonus trigger gift will move a household’s gift amount toward that trigger amount. If the trigger is greater than the size of the gift the household would otherwise give, the trigger increases the household gift. However, if the trigger is below the size of the gift the household would otherwise give, we expect that it will cause households to revise downward the amount given. Moreover, lower bonus trigger gifts will pull down the conditional average more than a relatively higher bonus trigger.

Taking the five theoretical considerations together, we have competing predictions. Relative to no trigger, the existence of a bonus trigger gift may increase or decrease the probability of giving and the size of the gift conditional on giving. Comparing across bonus trigger offers, larger triggers should have a nondecreasing effect on the probability of giving but could have any impact on the size of the gift.

Results

We first explore the response to the bonus trigger incentive by sequentially testing for differences in the means and distribution of donations across the control and three incentive groups for each of three questions. First, does the unconditional average revenue per mailing unit vary by incentive group? Second, does the response rate to the mailing vary by incentive group? And finally, conditional on the new donor making a gift, does the average donation amount vary by incentive group? We conclude our analysis with an empirical estimation for each of these three questions that adds binary variables to control for the specific source list of the mailing address.

Unconditional Average Gift Amount

We examine the unconditional average gift donation per solicitation—the average including households who did not respond—and report the results in Table 1. By design, the 14,023 mailing addresses are approximately evenly distributed into the four conditions with the number of mailing addresses by incentive group ranging from 3,493 addresses to 3,515 addresses. In addition, within each of the three mailing lists, households are balanced among the four conditions. In Panel A, the mean donation per mailing unit varies between $0.103 for the $1 incentive and $0.218 for the $10 incentive with the overall average of $0.142. Although the response rates are within the norm for this type of solicitation, the small percent of households choosing to make a donation combined with modest gift amounts results in a low mean gift per solicitation. A formal cost–benefit analysis of the mailing would require understanding both the explicit cost of the mailing as well as expected future gifts generated by acquiring first-time donors. The total amount paid by the foundation funding the bonus trigger gifts was $481.

Table 1.

Comparison of Average Gift Amount Full Sample.

Panel A: Unconditional mean donation per mailing unit by incentive group, in $US
	M	SD	Observations
No incentive	$0.130	1.986	3,504
$1 incentive	$0.103	1.593	3,493
$5 incentive	$0.115	1.731	3,515
$10 incentive	$0.218	3.234	3,511
Full sample	$0.142	2.233	14,023
Panel B: Test for differences by incentive group, t test of unconditional mean donations, and rank-order tests of the distribution
	M difference	Pr(T < t)	Pr(\|T\| > \|t\|)	Pr(T > t)	Mann–Whitney^a
Versus no incentive
$1 incentive	−0.027	(0.269)	(0.538)	(0.731)	(0.871)
$5 incentive	−0.015	(0.371)	(0.742)	(0.629)	(0.768)
$10 incentive	0.088	(0.915)	(0.170)	(0.085)*	(0.044)**
Versus $1 incentive
$5 incentive	0.012	(0.617)	(0.765)	(0.383)	(0.894)
$10 incentive	0.115	(0.970)	(0.060)*	(0.030)**	(0.063)*
Versus $5 incentive
$10 incentive	0.103	(0.951)	(0.097)*	(0.049)**	(0.084)*

Note. Significant results in bold.

Test for the probability that the samples have the same distribution. Results are consistent with Kruskal–Wallis Rank-order Test. P value in parentheses indicates null hypothesis of identical distributions.

p < .1. **p < .05. ***p < .01.

Panel B displays the results from the t test for whether the unconditional means vary by incentive group. The final column in Panel B reports results of the Mann–Whitney test for whether the samples have the same distribution, and we report the p values for the null hypothesis of identical distributions. The first three rows show the results for each incentive group relative to the control (or no bonus trigger incentive) group. The mean difference column reports the mean of the relevant treatment group less than the mean of the control group. Although unconditional means for the $1 and $5 bonus trigger incentive groups are lower than the control group, they are not statistically different from the control group. We report tests for both tails, as it is theoretically possible that the incentive lowers the unconditional mean donation. The $10 bonus trigger incentive group has a statistically significant larger average gift per mailing unit than the control group. The subsequent rows test whether the $5 or $10 incentive unconditional means are statistically different from the $1 incentive. There is no difference between the $1 incentive and the $5 incentive, but the unconditional mean donation in the $10 incentive ($0.218) is more than twice as large as that of the $1 incentive ($0.103), and the difference is statistically significant. The final row in Panel B displays the result that the unconditional mean donation of the $10 incentive is also statistically larger than the $5 incentive. The results for the rank-order tests of the distribution of donations mirror the results for the unconditional means. The $10 bonus trigger incentive group is statistically different from all other groups. The $1 and $5 incentive distributions do not statistically differ from each other or the control group.

Response Rates by Incentive Group

In many cases, generating a response from a potential new donor may be more important to a charity than the actual gift amount. The new donor presents an opportunity for additional future giving. The overall response rate is 0.7% with response rates varying between 0.57% for the no incentive group and a high of 1% for the group in the $10 incentive group. This level of response is consistent with those found in other studies.² Panels A and B in Table 2 mirror the results from Panels A and B of Table 1. Those households in the $10 bonus trigger incentive group are statistically significantly more likely to respond with a donation than either of the other incentive groups or the control group. In addition, the $1 and $5 incentives are not statistically different from each other or from the control group. These findings suggest that a bonus trigger incentive threshold is required with this type of offer to elicit a response from the targeted new donor.

Table 2.

Comparison of Response Rates by Incentive Group.

Panel A: Average response rate by incentive group
	M	SD	Observations
No incentive	0.0057	0.0753	3,504
$1 incentive	0.0060	0.0773	3,493
$5 incentive	0.0063	0.0789	3,515
$10 incentive	0.0100	0.0994	3,511
Full sample	0.0070	0.0833	14,023
Panel B: T test for differences of response rates by incentive group
	M difference	Pr(T < t)	Pr(\|T\| > \|t\|)	Pr(T > t)
Versus no incentive
$1 incentive	0.0003	(0.5662)	(0.8676)	(0.4338)
$5 incentive	0.0006	(0.6176)	(0.7647)	(0.3824)
$10 incentive	0.0043	(0.9785)	(0.0431)**	(0.0215)
Versus $1 incentive
$5 incentive	0.0003	(0.5526)	(0.8947)	(0.4474)
$10 incentive	0.0040	(0.9685)	(0.0630)*	(0.0315)**
Versus $5 incentive
$10 incentive	0.0037	(0.9585)	(0.0831)*	(0.0415)**

Note. p value in parentheses, significant results in bold.

p < .1. **p < .05. ***p < .01.

Average Gift Amount Among New Donors

We now turn to the average gift amount conditional on the potential donor responding with a donation. Panels A and B of Table 3 suggest the average gift will be smaller. The mean gift among the control group is $22.75, the highest of the four groups. The mean gift of the $1 incentive group is $17.19 and statistically smaller than the average gift among those in the control group. None of the other comparisons yields differences in average donations between incentive groups. The rank-order test reported in the last column of Panel B suggests that the $10 incentive group has a different distribution of gifts from the control group. As shown in Panel A, the $10 incentive group received one $100 donation, whereas the maximum gift for all other incentive groups was $50.

Table 3.

Comparison of Average Gift Amount Conditional on Giving a Donation.

Panel A: Mean donation per mailing unit by incentive group, in $US
	M	SD	Observations	Minimum	Maximum
No incentive	$22.75	13.618	20	10	50
$1 incentive	$17.19	11.609	21	1	50
$5 incentive	$18.41	12.188	22	10	50
$10 incentive	$21.85	24.347	35	5	100
Full sample	$20.27	17.580	98	1	100
Panel B: Test for differences by incentive group, t test of conditional mean donation, and rank-order tests
	M difference	Pr(T < t)	Pr(\|T\|>\|t\|)	Pr(T>t)	Mann–Whitney^a
Versus no incentive
$1 incentive	−$5.56	(0.083)*	(0.167)	(0.917)	(0.150)
$5 incentive	−$4.34	(0.141)	(0.282)	(0.859)	(0.213)
$10 incentive	−$0.89	(0.440)	(0.881)	(0.560)	(0.089)*
Versus $1 incentive
$5 incentive	$1.21	(0.631)	(0.739)	(0.370)	(0.701)
$10 incentive	$4.67	(0.793)	(0.415)	(0.207)	(0.942)
Versus $5 incentive
$10 incentive	$3.45	(0.730)	(0.540)	(0.270)	(0.569)

Note. p value in parentheses. Significant results in bold.

p < .1. **p < .05. ***p < .01.

Controlling for the Source of the Mailing Address

The purchased mailing lists came from three different consumer-based businesses. The customer base of these three businesses may be systemically different from each other. Therefore, our final analysis predicts the unconditional amount of the gift, likelihood of giving, and amount of the donation conditional on giving, controlling for the incentive group as well as an indicator variable for two of the three lists. The reference group is comprised of those in the control group and with addresses from the company providing List 1. The results are in Table 4. Column 1 contains the linear probability estimates from an ordinary least squares (OLS) regression of the likelihood that a letter will generate a donation. As previously mentioned, only a small percentage of letters resulted in a donation to the nonprofit. Due to the typical concerns regarding linear probability models, we also estimate the probability of responding to the direct mailing using maximum likelihood estimation, assuming the specifications take on a probit distribution. The marginal effects reported in column 2 are estimates of the variable contributions evaluated at the sample means for all the other controls. Finally, we use OLS to estimate the effect of the incentive groups and the source of the mailing list on the gift amount for the 98 mailing units that responded with a donation. These results are reported in column 3.

Table 4.

Multivariate Estimation Results.

	(1)	(2)	(3)
Variables	OLS: Donate?	Probit: Donate?	OLS: Donation amount conditional on giving
$1 incentive	0.0003	0.0006	−6.0426
	(0.8673)	(0.7802)	(0.2849)
$5 incentive	0.0005	0.0007	−3.6438
	(0.7652)	(0.7456)	(0.5082)
$10 incentive	0.0043**	0.0040**	−0.2574
	(0.0421)	(0.0436)	(0.9589)
List 2	0.0027**	0.0046**	9.1016
	(0.0369)	(0.0404)	(0.1497)
List 3	0.0105***	0.0109***	4.2082
	(0.0000)	(0.0000)	(0.4566)
Constant	0.0013		17.5289***
	(0.3045)		(0.0087)
χ² tests
$1 = $5	0.8956	0.9642	0.6637
$1 = $10	0.0646*	0.0787*	0.2482
$5 = $10	0.0841*	0.0854*	0.4833
List 2 = List 3	0.0000***	0.0000***	0.3125
Observations	14,023	14,023	98
R ²	.0033		.0408

Note. Robust p values in parentheses. Column (1) Linear Probability—Donation; (2) Probit—Donation; (3) OLS—Amount; column 2 displays the marginal effect of the variable calculated at the mean value of all the other variables. OLS = ordinary least squares.

p < .1. **p < .05. ***p < .01.

For each of the three estimations, the results are consistent with findings from the tests of differences in means. From column 1, the $10 bonus trigger incentive increases the likelihood of a donation relative to the excluded incentive group—the control group with no bonus trigger incentive. The results from the chi-square tests confirm that the $10 incentive group is distinct from the $1 and $5 incentive groups. In addition, we see that each of the three sources of the mailing addresses is distinct from each other. As we designed the experiment to equally distribute the four incentive groups within each of the three mailing lists, we did not expect that controlling for the mailing lists would change our results for the incentive groups. However, due to the source of the confidential lists, our results are consistent with the idea that those already sympathetic to the general mission of the nonprofit we worked with are more likely to give, whereas those with no connection to the issues addressed by the nonprofit will be less likely to give.

The results for the likelihood of giving a donation also match our findings from Table 2. Again the $10 incentive group is statistically significantly more likely to respond than either the control group or the $1 or $5 incentive groups. The other three groups do not have a differential effect on the likelihood of giving. Each of the three lists is significantly different from the other lists. Finally, the OLS regression of the amount donated conditional on giving suggests that none of our observable characteristics influence the donation amount.

Taken together, our consistent results suggest that small bonus trigger gifts of $1 and $5 do not induce potential donors to give to a charitable organization. However, the $10 bonus trigger gift nearly doubles the propensity to respond to the solicitation, an effect that is both statistically and economically significant. The conditional average donation did not change with the $10 bonus trigger gift, but the distribution of the gifts appears to shift to the right. In contrast, the conditional average donation with no incentive was significantly larger than that with the $1 bonus trigger gift. Although we are not able to definitively distinguish between our competing theoretical predictions, our results suggest that low bonus trigger offers may be distrusted by potential donors. That said, our largest bonus trigger gift of $10 may have sufficiently lowered price and signaled credibility and timing to the extent that a larger proportion of potential donors responded to the solicitation by giving to the charitable organization.

Conclusion

Acquiring new donors is an important goal for many charities looking to increase contributions to expand the assistance they provide in communities. One potential incentive mechanism is to find a foundation or individual willing to increase the value of a new donor’s gift. In this field experiment, we use a bonus trigger incentive, a fixed amount to be added to the gift of a new donor. We examine the influence of $1, $5, and $10 bonus trigger gifts on the mean unconditional gift amount, the likelihood that individuals respond with a gift, and the average gift conditional on a donation being received. The results from a mailing to more than 14,000 household units suggest that the additional gift can matter, but only for the largest promised bonus trigger gift within our experiment, $10. Additional research is needed to better understand what bonus trigger gift amounts may be related to discontinuous jumps in the likelihood of giving. The incentives did not alter the average gift conditional on giving, but if the goal of the nonprofit is new donor acquisition, then the promise of a fixed dollar addition to the initial donation may be beneficial to charities.

The difference in the probability of giving across the three different mailing lists suggests that charities should carefully consider the source of purchased mailing households. Households appear to be more likely to respond to a solicitation when they have past consumer purchases or connections to related charitable purposes.

Our novel use of bonus trigger gifts provides an alternative to the matching schemes commonly used by many organizations. While we advance the literature on the effects of incentives on giving behavior, future research can further extend our understanding of bonus trigger gifts. For example, do bonus trigger incentives work for other types of charitable organizations? Do larger bonus trigger gifts further increase the response rate, and do they increase the dollars given by respondents? Finally, what is the subsequent behavior of donors acquired through bonus trigger gifts?

Footnotes

Acknowledgements

Diette is appreciative of the financial support provided by the Lenfest Summer Research Grant through Washington and Lee University. The authors thank an anonymous foundation for financial support. Thanks to Russell James, participants at the Southern Economics Association Meetings, and the anonymous referees for comments and suggestions.

Authors’ Note

All errors are the responsibility of the authors.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biographies

Sara E. Helms-McCarty is an associate professor of economics and the Brock Scholars Program Coordinator in the Brock School of Business at Samford University in Birmingham, Alabama. Her research focuses on giving and volunteering behavior, education policy, the economics of religion, and health policy.

Timothy M. Diette is an associate professor of economics in the Williams School of Commerce at Washington and Lee University in Lexington, Virginia. His research focuses on education policy, health policy, and giving and volunteering behavior.

Betsy Bugg Holloway is a professor of marketing in the Brock School of Business and the chief marketing officer for Samford University in Birmingham, Alabama. She serves on the editorial review board of Journal of Marketing Theory and Practice, and her research interests include service marketing, retailing, and consumer behavior.

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