Why you shouldn’t let “donation matching” affect your giving?
https://blog.givewell.org/2011/12/15/why-you-shouldnt-let-donation-matching-affect-your-giving/
The article discussed a common marketing method employed by top charities – donation matching. Donation matching” refers to when a large funder offers to give $X to a particular charity for every $Y other people give – for example, “For every $1 you give to this charity, a large funder will contribute another $1, doubling your impact!” Such matching motivates donors’ willingness to double their donation. However, according to the article, people should not let “donation matching” affect their giving.
First, we categorized two cases in which donation matching would work:
- Coordination matching. A charity needs to raise a specific amount for a specific purpose. A large funder is happy to contribute part of the amount needed as long as the specific purpose is achieved; therefore, the matcher makes the gift conditional on other gifts.
- Influence matching. The matcher wishes both to support a particular charity and to encourage others to give to that charity. Therefore, the matcher makes a legitimate commitment to give only if others do, in an attempt to influence their giving.
In both cases, it may seem that the one-to-one matching can double the donation, but in real life most of them can be illusory deceptions. Regarding coordination matching, the article argued that if the funder were providing enough for 1:1 match, it wouldn’t be quite true that each $1 was matched with another $1. Regarding Influence matching, donors are highly possible to be influenced away from the most impactful charity to a less impactful one – just by the way they structure their gift. And most importantly, according to the article, most institutions making a large gift would be open to this whether or not they are matched with small donors.
Relating to the game theory topic we discussed in class, donating more because of donation matching is not an optimal choice since your behavior is independent of others’ under most circumstances. Therefore, donors seeking to maximize their impact can simply support the most impactful charity possible, and not to factor in the presence or absence of donation matching either way.