Charitable giving when donors are constrained to give a minimum amount

Abstract

Abstract In some instances charities insist on donors giving more than a minimum amount. In other instances charities frame appeals for funds in a way that suggests there is a minimum donation. So, what are the effects on charitable giving if a minimum donation is required? We first provide a simple theoretical model that shows the effects are ambiguous. We then report the results of two lab experiments that consider very different settings. In the first experiment the only incentive to give is intrinsic motivation. Here we find that a minimum constraint lowers giving. The second experiment involves group interaction with extrinsic incentives to give. Here we find that a minimum constraint increases giving. Our results suggest that the effects of a minimum constraint may depend critically on the mix of intrinsic and extrinsic incentives.