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| Cagri Kumru and Lise Vesterlund |
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| ''The effect of status on charitable giving'' |
| ( 2010, Vol. 12 No.4 ) |
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| Fundraisers often start their campaigns by soliciting the wealthier, more recognized and respected individuals in a community. We examine whether the success of this solicitation ordering in part can be attributed to the fact that it enables individuals to select organizations that have a high-status donor base. Assuming that individuals prefer to associate with individuals of higher social ranking we use a simple linear model to show that both aggregate donations and earnings are larger when high-status donors are solicited first. We investigate the predicted comparative statics using the experimental laboratory. Inducing a status differential we reverse the contribution ordering between participants of high and low status. Consistent with current fundraising practice we find that low-status followers are likely to mimic donations by high-status leaders and this encourages high-status leaders to give. Donations are therefore larger when individuals of high status give before rather than after those of low status. |
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| Keywords: Charitable giving, status, fundraising, sequential giving. |
JEL: C9 - Design of Experiments: General
H0 - Public Economics: General |
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| Manuscript Received : Nov 14 2008 | | Manuscript Accepted : Mar 08 2012 |
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