Tuesday, April 24, 2012

Named matching donor are best to elicit more donations

US universities care a lot about donations, as much of their operations are financed by endowment revenue. Foundations also spend considerable resources trying to build this endowment. Hence, it is no surprise that there is a steady stream of research on how to best elicit donations, especially from private universities. One of the big issues they face is to generate the first dollar in donation (which costs several dollars), after that it is usually much easier to get more donations.

Dean Karlan and John List find through experimentation that matching donors are particularly effective in enticing other donations, especially where they are named and recognizable. The latter effect is even stronger for new donors. The challenge now is to find the matching donor. The experiment was performed with the Gates Foundation, I doubt many other potential matching donors can be found to have such high appeal. The experiment may have been too extreme to draw reliable conclusions.

No comments: