Charities and fundraising organizations use donation grids as anchors to influence donation amounts. In this paper, we show that the impact of these donation grids on the various components of donation behavior (compliance and donation amount) can be captured by an econometric model that taps into the social psychology literature, especially the contrast theory (Sherif, Taub, and Hovland, 1958) and the adaptation level theory (Helson, 1964). We develop two separate econometric models to estimate the impact of donation grids on (a) likelihood of donation and (b) donation amounts, and show that congruency of requests with donors? internal reference points plays an important role in determining the impact of charities? tactics. We then apply these models in a large field experiment, and individually tailor suggested donation grids to 100,000 solicited donors. Contrasted to the control group, optimizing donation grids at the individual level increased donation amounts by +22%, and net margins by +36%.
PROKOPEC, S. and DE BRUYN, A. (2010). Optimizing Donations with Individually-tailored Donation Grids: An Econometric Model of Compliance and Generosity. In: Proceedings of the 39th EMAC Conference. European Marketing Academy (EMAC).