An Experimental Investigation of Charity Rebates

We investigate experimentally the effects of various sources of rebates on charity donation. Subjects first play a repeated public good game (PGG) with either a low or a high endowment and then have an option to donate to a charity. They may receive a rebate on their donation either exogenously (from the experimenter) or endogenously (from the public account of the PGG), or a rebate might not be available. When the PGG endowment level is low, the endogenous rebate scheme has a negative effect on charity giving. The exogenous rebate scheme, however, does not have any such effect. If the endowment level is high and the rebate is endogenous, then other-regarding preferences become salient and boost up charity donation. Females donate more than males, but only under the endogenous rebate scheme. These results shed light on the effects of the rebate schemes on different income and demographic factors, and provide with relevant policy implications.