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Crypto Thank-You Rewards and Charitable Giving Outcomes

Article arXiv papers · Author: Jane et al.
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Summary

This document reports two studies of crypto rewards offered as conditional gifts to charitable donors. The first examines the Ukrainian government’s fundraising appeal accepting Bitcoin and Ethereum. When crypto rewards were present, the hourly donation count rose more for Ethereum than Bitcoin, while contribution sizes fell more for Ethereum. The authors suggest that greater availability of rewards on Ethereum may help explain the difference.

The second study uses a dictator-game laboratory design and NFT rewards with symbolic rather than monetary value. NFT gifts did not induce donations as effectively as a traditional one-to-one donation match or the no-gift condition. Among participants who chose to give, however, NFT designs that emphasized donor identity and the recipient charity increased contribution sizes. The results vary by setting and reward design; the document does not establish that these effects generalize to other campaigns or donor populations.

Key ideas

  • The field study compares Bitcoin and Ethereum donations when crypto rewards are offered.
  • Ethereum saw a larger increase in donation counts and a larger decrease in contribution sizes than Bitcoin.
  • The authors associate Ethereum’s stronger count response with greater availability of crypto rewards there.
  • In a laboratory dictator game, symbolic NFT gifts did not outperform one-to-one donation matching in inducing gifts.
  • NFT design could increase gift size among donors when it highlights donor identity and the charity recipient.

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Full text
# The Effect of Crypto Rewards in Fundraising: From a Quasi-Experiment to a Dictator Game


# The Effect of Crypto Rewards in Fundraising: From a Quasi-Experiment to a Dictator Game









Conditional thank-you gifts are one of the most widely used incentives for charitable giving. Past studies explored non-monetary thank-you gifts (e.g., mugs and shirts) and monetary thank-you gifts (e.g., rebates that return some of the donations to the giver). Following the rapid growth of blockchain technology, a novel form of thank-you gifts emerged: the crypto rewards. Through two studies, we analyze crypto thank-you gifts to shed light on fundraising designs in the digital world. In Study I, we examine the Ukrainian government's crypto fundraising plea that accepts donations in both Ethereum and Bitcoin. We find that Ethereum is substantially more effective in enticing giving than Bitcoin, as the hourly donation count increased 706.07% more for Ethereum than for Bitcoin when crypto rewards are present. This is likely because the crypto rewards are more likely to be issued on Ethereum than Bitcoin. However, the decrease in contribution sizes is also more substantial in Ethereum than in Bitcoin in response to the crypto rewards. In Study II, we conducted a laboratory experiment following a dictator game design to investigate the impact of crypto rewards in a more general scenario, with the crypto rewards specified as non-fungible tokens (NFTs). The crypto rewards in Study II carry no monetary value but only serve to recognize donors symbolically. As such, the NFT thank-you gifts did not effectively induce people to donate; a traditional 1:1 donation matching strictly outperforms both the condition without thank-you gifts and the condition with NFT thank-you gifts. Nevertheless, the NFT thank-you gifts effectively increased the contribution sizes, conditional on the choice to give, when the NFT's graphic design primes donor identity and encompasses the charity recipient.

Shown in full with attribution under the source's licence. Licence: abstract CC0

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.