Does Online Fundraising Increase Charitable Giving?

Does online fundraising increase charitable giving? Using the Facebook advertising tool, the authors of the presented paper 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. The authors studied changes in the volume and frequency of donations to Save the Children and other charities by postal code. Their design circumvents many shortcomings inherent in studies based on click-through data, especially substitution and measurement issues. They found that (i) video fundraising increased donation frequency and value to Save the Children during the campaign and in the subsequent five weeks; (ii) the campaign was profitable for the fundraiser; and (iii) the effects were similar independent of video content and impression assignment strategy. However, they also found non-negligible crowding out of donations to other similar charities or projects. Finally, they demonstrated that click data are an inappropriate proxy for donations and recommend that managers use careful experimental designs that can plausibly evaluate the effects of advertising on relevant outcomes.