Policy Research

Using Suggested Contributions in Fundraising for Public Goods: An Experimental Investigation of the Provision Point Mechanism

Melanie D. Marks, Eric Schansberg, Rachel T.A. Croson

Summary

suggested contributions on the giving habits of people towards a public good. Due to fiscal stress and lower tax revenues, many state and local governments may utilize voluntary contributions to fund public good projects like parks or libraries. Marks, Schansberg, and Croson find that suggested contributions don’t affect the giving habits if every subject values the public good equally. However, differing values of a public good among subjects are common in the real world. When the value placed on the proposed public good is different to each subject, suggested contributions tend to have an effect on the subjects’ behavior. If applied to the real world, provided suggested contributions could lead to more public good projects getting funded.

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Policy Implications

This research suggests that policymakers should provide suggested contributions when seeking voluntary donations for a project. Doing this will increase the likelihood that the project will receive the amount of funding needed to be completed.