How category reporting can improve fundraising

Many fundraisers report donations using categories such as more than £ 1000, more than £ 10,000, etc. One naturally wonders how we should categorise donations and whether categorising raises more than simple uncategorised reporting. To answer these questions, we employ a signalling game framework in which both the donor's donation and his benefits of being in a higher category are determined endogenously. We find that categorised reporting can always improve fundraising. Both high and low category thresholds can increase donations, with prior beliefs determining which is better. While categorising can lead to the existence of a low donation equilibrium, it is less problematic if signalling benefits are low.

► We examine how a fundraiser should categorise the donations they publicise.
► In our model, the donor's benefit of being in a category is endogenous.
► We find that both high and low category thresholds can increase donations.
► A low donation equilibrium may also exist, especially when using a high threshold.
► The low donation equilibrium is less problematic if signalling benefits are low.