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Evaluating Fundraising Strategies for a Public Park
A small community of 200 households wants to build a new public park. The total cost is $20,000. If built, the park will provide a benefit equivalent to $150 to every household, regardless of whether they contributed financially. The town council is considering three different strategies to raise the funds through voluntary donations. Analyze the three proposed strategies below. For each strategy, explain how effectively it addresses the incentive for individuals to benefit from the project without contributing. Conclude by identifying which strategy you believe would be most effective and provide a clear justification for your choice.
- Strategy A: Simple Appeal: Send a letter to all households explaining the benefits of the park and asking for a voluntary donation of $100 per household.
- Strategy B: Conditional Pledges: Ask households to pledge $100, but state that no money will be collected unless at least 180 households (90% of the community) make a pledge.
- Strategy C: Contribution Matching: A wealthy resident offers to match every dollar donated by the community, up to a total of $10,000. This means the community only needs to raise $10,000 on its own to fully fund the park.
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