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When and Why Matches Are More Effective Subsidies than Rebates

Replication in Experimental Economics

ISBN: 978-1-78560-351-8, eISBN: 978-1-78560-350-1

Publication date: 13 October 2015

Abstract

This paper replicates and refines the finding that subsidies for charitable contributions of a rebate type are less effective than matching subsidies. A survey based field experiment with health charities was conducted among a national sample representative of the Dutch population on key demographic characteristics. The greater effectiveness of matching subsidies found in laboratory experiments is replicated. Also some evidence is provided on why matches are more effective than rebates. Matches attract a larger pool of donors, in part because donors expect more people to make donations and “join in.” Matches also increase the amount contributed among the higher educated, higher income households and larger donors. Subsidies of either type do not decrease subsequent giving in a campaign for tsunami relief. The experiment could not test whether the greater effectiveness of a matching subsidy is due to a change in the donor’s attention to the benefits of a donation to the cause. This explanation should be tested in future research. The findings imply that a given budget available to subsidize charitable contributions can be used more effectively if the subsidy is framed in the form of a match than in the form of a rebate. Nonprofit organizations can use this insight in the design of fundraising campaigns. For governments the finding suggests that the effectiveness of current subsidies for charitable contributions can be enhanced by matching them rather than providing a deduction in the income tax, which works as a rebate.

Keywords

Acknowledgements

Acknowledgments

This research was supported by a “Veni”-grant (#451–04–110) from the Netherlands Organization for Scientific Research (NWO) and the Royal Academy of Arts and Sciences/Van der Gaag Stichting. The data collection for this study was funded by grants from the Ministry of Justice, the Ministry of Education, Culture and Science, the Ministry of Housing, Spatial Planning and Environmental Affairs, the Ministry of Agriculture, Nature and Food Quality, and the Centre for Global Citizenship (NCDO) to the Center for Philanthropic Studies and matching grants from TNS/NIPO, which conducted the fieldwork. Parts of the data presented here were presented in Bekkers (2006). A previous version of the current paper was presented at the 33rd Annual Arnova Conference, Washington DC, November 17–20, 2005. I thank the editor, an anonymous reviewer, Stephan Meier, and Dave Verkaik for their helpful comments.

Citation

Bekkers, R. (2015), "When and Why Matches Are More Effective Subsidies than Rebates", Replication in Experimental Economics (Research in Experimental Economics, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 183-211. https://doi.org/10.1108/S0193-230620150000018007

Publisher

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Emerald Group Publishing Limited

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