Charitable Giving and Cooperation

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Americans contribute substantial amounts to charities every year, helping secure jobs for millions of people and services to many more. Unfortunately the economic downturn has increased the demand for charitable services and simultaneously reversed the otherwise steady increase in giving. As a result many organizations are now strapped for funds, and it is clearer than ever that we need to better understand why people give and how we can encourage them to give more. This proposal presents three different research projects which aim to improve our understanding of charitable giving. The first develops a new method for examining voluntary contribution in the experimental laboratory, the second uses this method to study fundraising techniques, and the third extends current research on gender difference in cooperative behavior suggesting that non-profits may benefit from varying solicitation strategies by gender.Intellectual merit: The three proposed projects will each present a significant intellectual contribution. First, a new method for testing charitable giving in the experimental laboratory is developed and tested. The theoretical characteristics of the proposed methods are not only superior to standard methods, initial results also suggest that it is more transparent and less sensitive to behavioral error. Thus the study will provide an important methodological contribution. The second project uses this new method to study central fundraising strategies. These studies will shed light on the empirical relevance of existing theories on charitable giving and will provide guidance for the development of new models. Of particular interest will be to determine under what circumstances fundraisers do or do not benefit from informing donors of the amount of money that has been contributed to date. While recent research suggests that announcements are beneficial the study indentifies a series of cases where this is not the case The third study merges the literatures on gender differences in cooperation and competition. Examining gender differences in cooperative behavior under competitive pressure, it will be determined if the stronger competitive drive for men may be detrimental when there are social gains from cooperative behavior. Broader impact: The proposed work will improve our understanding of charitable giving and of the mechanisms that are most likely to succeed in raising funds. The results will be of interest to practitioners as well as to donors and recipients of non-profit services. While the study on gender differences in cooperative and competitive behavior provides insights on how fundraisers may benefit from varying the solicitation strategies between men and women it will also improve our understanding of gender differences in the labor market. While it has been noted that men are more competitive and that this may help explain why they are more likely to hold top managerial positions, the proposed study may demonstrate that in cooperative settings the drive to succeed in competitions may come at a significant cost.