March, 2015

The Effect of Social Information on Giving from Lapsed Donors: Evidence from a Field Experiment

  • Kristoffer

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Using data from an experiment carried out by a large nonprofit organization, this paper finds that lapsed donors who received a solicitation letter referencing a relatively high donation made by another donor (high social information) were more generous in giving, but overall less likely to make a donation, relative to the baseline (low social information) group. After using the propensity score matching to correct for pre-treatment differences in the two experimental groups, the estimated effect of high social information on the average donation amount is an increase of $14.95 (45%). However, high social information is also found to reduce the probability a lapsed donor will give by 4.1%. Thus, high social information can have potentially offsetting effects when applied to lapsed donors. Nonprofits should consider this trade-off when employing social information fundraising techniques to solicit donations from lapsed donors.

Find article at Springer Link