The Coin Strategy and Charitable Giving

Abstract

I asked a cooperative charity whose headquarters is located in Seoul, South Korea, to send 16,000 solicitation letters of four different types, with each having a different attachment, in order to better understand the philanthropy initiatives and individuals' social preferences by collecting responses and comparing them by letter type. They received one donation and 381 'active' returns in eight weeks. The real coin attachment, though some charities including UNICEF have used this 'coin strategy,' did not bring a significantly positive effect. A sense of involuntarily indebtedness does not seem to be one of the major driving forces behind reciprocity. The coin attachment appeals to the potential donor's inequity aversion: A significantly larger proportion of mail recipients returned the letter with 100 Korean won than those with no attachment. I also claim that the results from the previous studies should be extrapolated with extra care due to the sample selection bias.