Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment

We conducted a natural field experiment to further our understanding of the economics of charity. Using direct mail solicitations to over 50, 000 prior donors of a nonprofit organization, we tested the effectiveness of a matching grant on charitable giving. We find that the match offer increases both the revenue per solicitation and the response rate. Larger match ratios (i. e. , 3: 1 and 2: 1) relative to a smaller match ratio (1: 1) had no additional impact, however. The results provide avenues for future empirical and theoretical work on charitable giving, cost-benefit analysis, and the private provision of public goods. (JEL D64, L31)