Personalized Fundraising: A Field Experiment on Threshold Matching of Donations

Abstract

While increasing the number of small donors, standard linear matching schemes have been shown to cause considerable crowding out in charitable giving with pronounced effects on large gifts. We propose a form of threshold matching where donations above a certain, potentially personalized, threshold are topped up with a fixed amount. We show theoretically that threshold matching can induce crowding in if appropriately personalized. In a field experiment, we explore how thresholds should be chosen depending on past donations. We find that the optimal choice of thresholds is rather bold, approximately 60-75% above past donations. Additionally, we explore how thresholds should be set for new donors as a function of their personal characteristics and demonstrate the benefits of personalization as opposed to setting general thresholds applying to all recipients of a fundraising call.