Water the Flowers You Want to Grow? Evidence on Private Recognition and Donor Loyalty
CESifo, Munich, 2020
CESifo Working Paper No. 8424
![](https://cesifo.org/DocImg/cesifo1_wp8424.jpg?c=1689237027)
We study donor loyalty in the context of church membership in Germany. Church members have to make substantial payments to their church but can opt out at any time. In a large-scale field experiment, we examine how private recognition for past payments affects church members’ loyalty. We find that recognizing past payments in a letter significantly reduces opt-outs. This effect is driven by members in the bottom quartile of baseline payments to the church. Consistent with optimization frictions prior to the experiment, we observe a spike in opt-outs immediately after treatment for particularly costly memberships.
Public Finance
Behavioural Economics