Working Paper: CEPR ID: DP12338
Authors: Kimberley Scharf; Sarah Smith; Mark Wilhelm
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.
Keywords: Warm Glow; Donations; Substitution; Intertemporal Substitution
JEL Codes: H41; D12; D64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| major fundraising appeals (D64) | increase in total donations to dec13 (D64) |
| increase in total donations to dec13 (D64) | donations to dec13 return to baseline levels (H84) |
| major fundraising appeals (D64) | increase in donations to other charities (D64) |
| increase in donations to other charities (D64) | decrease in donations to other charities in adjustment phase (D64) |
| major fundraising appeals (D64) | no significant shift in donations to other charities (D64) |
| warm glow from donations to dec13 (D64) | substitute for warm glow from donations to other charities (D64) |