Does Online Fundraising Increase Charitable Giving? A Nationwide Field Experiment on Facebook

Abstract

Does online fundraising increase charitable giving? Using the Facebook advertising tool, we implemented a natural field experiment across Germany, randomly assigning almost 8,000 postal codes to Save the Children fundraising videos or to a pure control. We studied changes in the donation revenue and frequency for Save the Children and other charities by postal code. Our geo-randomized design circumvented many difficulties inherent in studies based on click-through data, especially substitution and measurement issues. We found that (i) video fundraising increased donation revenue and frequency to Save the Children during the campaign and in the subsequent five weeks, that (ii) the campaign was profitable for the fundraiser, and that (iii) the effects were similar independent of video content and impression assignment strategy. However, we also found some crowding out of donations to other similar charities or projects. Finally, we demonstrated that click data may be an inappropriate proxy for donations and recommend that managers use careful experimental designs that can plausibly evaluate the effects of advertising on relevant outcomes. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: M. Adena acknowledges financial support from the Deutsche Forschungsgemeinschaft [Grants 417014946 and CRC TRR 190 (Project 280092119)]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2020.00596 .