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Charitable Giving and Fundraising: when Beneficiaries Bother Benefactors

Many instances partly or even totally depend on philanthropic gifts. Yet, such private donations usually do not occur if not distinctly solicited. An intermediate process becomes necessary, with the objective to address potential benefactors. So, most of these entities exert some sort of fundraising. Our approach is to model the potential conflict between benefactor and beneficiary with respect to the extent of fundraising activities, where the beneficiary is assumed to prefer a strictly higher level of fundraising than the benefactor would deliberately choose. The outcome of the common 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 what we call strategic bounteousness.