The Effect of Social Information on Giving from Lapsed Donors: Evidence from a Field Experiment

Using data from an experiment carried out by a large nonprofit organization, this paper finds that lapsed donors who received a solicitation letter referencing a relatively high donation made by another donor (high social information) were more generous in giving, but overall less likely to make a donation, relative to the baseline (low social information) group. After using the propensity score matching to correct for pretreatment differences in the two experimental groups, the estimated effect of high social information on the average donation amount is an increase of $14.95 (45 %). However, high social information is also found to reduce the probability a lapsed donor will give by 4.1 %. Thus, high social information can have potentially offsetting effects when applied to lapsed donors. Nonprofits should consider this trade-off when employing social information fundraising techniques to solicit donations from lapsed donors.