Why Don't Donors Deduct? Social Norms and the Limits of Tax Incentives

Abstract

While nearly all donors deduct online, fewer than 1 in 100 do so face-to-face. Using lab, online, and field experiments, we show that misperceived norms about whether claiming deductions makes donors appear less generous, rather than informational frictions, drive this gap, and that norm cues increase take-up where information alone fails. Financial incentives thus falter when clashing with misperceived norms in social settings, unless paired with norm-reshaping campaigns.