Berthold U. Wigger // Universität Erlangen-Nürnberg
Charitable Giving and Fundraising: When Beneficiaries Bother BenefactorsResearch Seminars
Many instances - corporate or in-person - depend on philanthropic donations,and most of these entities exert some sort of fundraising. Thus, anintermediate process is installed, even though a charitable benefactor oughtto be interested in limiting the frictions, i.e., the effort a beneficiaryneeds to undertake in order to receive the donation. Our approach is tomodel the potential conflict between benefactor and beneficiary with respectto the extent of fundraising activities, where the beneficiary is assumed toprefer a strictly higher level of fundraising than the benefactor woulddeliberately choose. The outcome of the ""natural"" fundraising process proves inefficient. A Pareto-optimal allocation can either be achieved by a tax privilege of donations or by commitment of the benefactor to strategicbounteousness.