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Discussion Paper Details

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Title: Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty

Author(s): Benjamin Bittschi, Nadja Dwenger and Johannes Rincke

Publication Date: July 2020

Keyword(s): Charitable Giving, donor loyalty, field experiment, Private recognition and recurring donors

Programme Area(s): Public Economics

Abstract: We study donor loyalty in the context of church membership in Germany. Church members have to make substantial payments to their church but can opt out at any time. In a large-scale field experiment, we examine how private recognition for past payments affects church members' loyalty. We find that recognizing past payments in a letter significantly reduces opt-outs. This effect is driven by members in the bottom quartile of baseline payments to the church. Consistent with optimization frictions prior to the experiment, we observe a spike in opt-outs immediately after treatment for particularly costly memberships.

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Bibliographic Reference

Bittschi, B, Dwenger, N and Rincke, J. 2020. 'Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14996