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How Can Bill and Melinda Gates Increase Other People’s Donations to Fund Public Goods?
Dean Karlan, John A. List
The authors use two large scale, natural field experiments to test the efficacy of matching donors on soliciting donations to NGO’s and then to test the efficacy of naming said matching donors, in this case Bill and Melinda Gates. They find that having a matching donor significantly increased donations, and that naming the matching donor increased them even further. They conclude that Bill and Melinda Gates acted as a “quality signal” to other donors, signaling that their money would be put to effective use.
NGO’s that seek to raise money through individual donations may capitalize on “quality signaling”. While not all non-profits have access to Bill and Melinda Gates, the name of a trusted friend or community leader as a fellow donor may encourage more and larger donations to any number of organizations.
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