A Theory of Outsourced Fundraising: Why Dollars Turn into 'Pennies for Charity'
dc.contributor.author | Paskalev, Z | |
dc.contributor.author | Yildirim, H | |
dc.date.accessioned | 2016-12-05T23:58:41Z | |
dc.date.issued | 2014-12-06 | |
dc.description.abstract | Charities frequently rely on professional solicitors whose commissions exceed half of total donations. To understand this practice, we propose a principal-agent model in which the charity optimally offers a higher commission to a more “efficient” solicitor, raising the price of giving significantly. Outsourcing is, therefore, profitable for the charity only if giving is very price-inelastic. This, however, clashes with empirical evidence. We show that paid solicitations can benefit the charity if: (1) donors are unaware; (2) donors have intense “warm-glow” preferences; or (3) the charity worries mostly about watchdog ratings. We argue that informing the public of the mere existence of paid solicitations may be the most effective policy available. | |
dc.identifier.uri | ||
dc.publisher | Elsevier BV | |
dc.relation.ispartof | Economic Research Initiatives at Duke (ERID) Working Paper | |
dc.subject | fund-raising | |
dc.subject | solicitation | |
dc.subject | outsourcing | |
dc.subject | charitable giving | |
dc.title | A Theory of Outsourced Fundraising: Why Dollars Turn into 'Pennies for Charity' | |
dc.type | Journal article | |
pubs.issue | 189 | |
pubs.notes | Source info: Economic Research Initiatives at Duke (ERID) Working Paper No. 189 | |
pubs.organisational-group | Duke | |
pubs.organisational-group | Economics | |
pubs.organisational-group | Trinity College of Arts & Sciences |