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Jane Tan

Cox School of Business | Southern Methodist University

The Gift to Give: The Economic Value of Charitable Gifts

Date: Friday, November 8, 2024
Time: 10:30 am - 12:00 pm EDT
Location: Bronfman Building, Room 245

All are cordially invited to attend.

About:

Gift sending is a social behavior to transfer goods or services voluntarily. A charitable gift card is a novel fundraising instrument that can be purchased by a gift sender and sent to a gift recipient to support charitable projects on the crowdfunding platform issuing the gift card. We explore the impact of sending or receiving a charitable gift card using donation data from 277,358 gift card senders and 31,194 gift card recipients six months before and after they sent or received charitable gift cards. We account for the endogenous event of sending or receiving a charitable gift card using a network-based instrumental variable; we adopt both two-stage least squares and double machine learning estimation strategies. We find that gift senders reduced their own giving after sending a charitable gift, except when the gift senders sent a low-valued gift card to a donor experienced with the platform. More in-depth investigation shows this effect is because of the unintended social comparison activated by the gift-sending behavior. We also find that gift recipients experienced with the platform reduced their own giving after receiving and spending the charitable gift card. However, gift recipients who have no experience with this platform would donate more if they were given a higher-valued gift card to join the platform. Finally, we find that charitable gift card sending unexpectedly activated social comparisons, where users reduced their own giving when they donated more than the other party historically (downward social comparison) and increased their own giving when they donated less (upward social comparison). Moreover, the upward social comparison is found to be stronger for charitable gift card senders, and the downward social comparison is more salient for charitable gift card recipients. These findings make unique contributions to the literature by underscoring the potentially negative consequence of using charitable gift cards.