Saturday, July 23, 2011

Matching Works. More Matching Doesn’t.

Many fundraisers can attest to the response increase caused by a matching gift opportunity.  But, does it matter if the match is $1 for $1, $2 for $1, or $3 for $1?  Dr. Dean Karlan of Yale University and Dr. John A. List of the University of Chicago set out to answer this question by conducting an economic field experiment.  Working with a politically liberal nonprofit focused on civil liberties and a donor willing to provide matching funds, they created several different matching gift opportunities.  Appeal letters were mailed to 50,000 donors who had given to the organization in the last 15 years.  (The mailing excluded major donors giving over $1,000.)  Two-thirds received an appeal letter and a separate card announcing that another donor was willing to match their gift.  The match was either $1 for each $1 given, $2 for each $1 given, or $3 for each $1 given.   Others received the same letter, but without the matching gift opportunity. 

            The response rate was 1.8% for letters without the match.  Letters with a matching gift offer had a response rate of 2.2%.  Without a match, each letter sent averaged 81¢ in contributions.  With a match, this average rose to 95¢.  However, the results from matching did not rise as the matching level increased.  In most measures, the matching ratio made no significant difference.  When there was a slight difference, the 2-1 match outperformed both the 3-1 and 1-1 match. 

The matching gift letters also included different descriptions of the maximum total amount that the anonymous donor had agreed to match.  The letters indicated that the donor would match up to $25,000, $50,000, $100,000, or, alternatively, the maximum was not stated.  Differences in this maximum amount had no affect on the response rate.  (Oddly, the average contribution per letter sent was highest for the $25,000 maximum amount.)

A final finding of the research was that the effectiveness of the matching offer depended upon the region’s political leanings.  In states that had voted for Bush in the 2004 election, the matching gift offer had a very strong positive effect on donations.  The same offer had no significant effect in states that had voted against Bush in the 2004 election.  Of course, these results may differ depending upon the type of nonprofit organization.  Nevertheless, the study authors suggest that, despite fundraiser claims to the contrary, the level of match makes no difference in donor response.

            (The American Economic Review, Vol. 97, pp. 1774-1793)

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