Charity in the Laboratory: Matching, Competition, and Group Identity

We conduct a laboratory experiment in which participants can make donations to real charities. We vary whether the experimenter provides matching funds for any such donations, and whether there is individual or team competition for these matching funds. Our results indicate that providing matching funds for all donations does increase donations from 23% to 33% of the endowment. While individual competition for matching funds had nearly the same effectiveness as matching all donations, by far the most effective approach was to form (anonymous) teams that competed for matching funds; this led to donations of 47% of the endowment. We appeal to the notion of group identity to explain our results--participants seemed to be reluctant to 'let down their team' in a competition. Our results can be seen as providing support for the notion that combining group identity and competition creates a motivation that can potentially be harnessed effectively for prosocial purposes. History: Accepted by Uri Gneezy, behavioral economics. Funding: The Science of Philanthropy Institute graciously provided the funding for this experiment. Keywords: charitable contributions * laboratory experiment * matching funds * competition * team competition * group identity
1. Introduction An issue of considerable economic importance is how to encourage philanthropic activity. In the United States, $324 billion was donated to charitable organizations in 2015, with more than [...]