“Jackpot for Good: Can Lottery Matches Increase Charitable Giving?” (with J.N. Lahey and M.A Palma )

Abstract: We investigate the impact of matching gift schemes using lotteries, in which the lottery match would benefit the charity, on charitable giving. We recruit 1,402 online participants to investigate the effects in seven conditions: “No Match" (Control), two sets of matching schemes of varying equivalent expected values: EV=1 (1:1 Match, 1:10% of 10 tokens, and 1:1% of 100) and EV=0.5 (2:1 Match, 1:1% of 50 tokens and 1:0.5% of 100), where a token is $0.50. Participants complete three 10-token allocation decisions for hunger-related charities and one allocation is randomly selected for realization. The 1:1 matching significantly increases giving by 15.7% compared to No Match. We find that matching schemes with a small probability of a very large amount (1% and 0.5% of 100) have significantly higher rates of giving compared to No Match (p=0.02 and p=0.10 respectively) and do not statistically differ from the 1:1 matching (p=0.98 and p=0.62 respectively). Our results have economic significance for non-profits to fundraise at lower fundraising costs while increasing donations via matching.