DP14996 Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty
|Author(s):||Benjamin Bittschi, Nadja Dwenger, Johannes Rincke|
|Publication Date:||July 2020|
|Keyword(s):||Charitable Giving, donor loyalty, field experiment, Private recognition, recurring donors|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=14996|
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.