DP10051 Relational Warm Glow and Giving in Social Groups

Author(s): Kimberley Scharf, Sarah Smith
Publication Date: June 2014
Keyword(s): charity, donations, fundraising, online giving, social groups, warm glow
JEL(s): D64, H31, Z1
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10051

We study charitable giving within social groups. Exploiting a unique dataset, we establish three key relationships between social group size and fundraising outcomes: (i) a positive relationship between group size and the total number of donations; (ii) a negative relationship between group size and the amount given by each donor; (iii) no relationship between group size and the total amount raised by the fundraiser. We rule out classic free-riding to explain these relationships since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by ?relational? warm glow.