DAO-ISEM-IORA Seminar Series: Ignacio Rios

Ignacio Rios

BIZ1 0302

Designing Effective Fundraising Campaigns: The Role of Incentives and Solicitation Mechanisms

Charitable donations are a vital source of funding for nonprofit organizations, enabling them to carry out their mission of addressing social issues and providing support to those in need. To boost contributions, third parties often donate large sums that fundraisers use to incentivize individual donations, with one-to-one matching being the most common mechanism. However, alternative designs may lead to even higher contributions. This paper investigates the effectiveness of two design choices in the context of fundraising: (i) the incentive mechanism, focusing on the two most prevalent ones (i.e., matching and gift unlock); and (ii) the solicitation mechanism, i.e., whether donations occur simultaneously or sequentially. We introduce a stylized game-theoretical model where a fundraiser decides the design choices and corresponding design parameters to maximize overall donations. Following the fundraiser’s decision, donors make their one-time contribution. For each design choice, we characterize the equilibrium donations and find the fundraiser’s optimal policy. We find that gift unlock consistently outperforms matching. Moreover, sequential solicitation is the optimal choice with gift unlock, whereas simultaneous solicitation yields higher overall contributions with matching. Furthermore, our simulations indicate that the effectiveness of gift unlock is robust to peer effects and donor participation uncertainty. Our findings indicate that fundraisers should prioritize gift unlock over matching, align the selected incentive mechanism with the optimal solicitation format, and calibrate campaign parameters to maximize donation outcomes.

Ignacio Ríos is an Assistant Professor of Operations Management at the Jindal School of Management, University of Texas at Dallas. He holds a Ph.D. in Operations, Information, and Technology and an M.A. in Economics from Stanford University, as well as degrees in Operations Management and Industrial Engineering from the University of Chile. His research expertise lies in behavioral market design, with a focus on how incentives, information, allocation rules and users’ behavior shape outcomes in markets without money. Ignacio has played a leading role in the reform of Chile’s school choice and college admissions systems, and also in designing other two-sided matching markets. His work has been recognized with numerous awards, including the Poets & Quants “40 Under 40 Best Business School Professors” distinction, the IFORS Prize for OR in Development, and the BOM Best Paper Award.