Working Paper: NBER ID: w17635
Authors: James Andreoni; A. Abigail Payne
Abstract: Using data from charitable organizations in the US, authors have established that government grants to charities largely crowd out giving from other sources, but that this reduction is due mostly to reduced fundraising activities of the charity itself. We use much more detailed data from over 6000 charities in Canada, measured for up to 15 years, to provide valuable new insights into this phenomenon. In particular, dollars received from individuals is largely unchanged by government grants. Instead, the crowding out is attributable to two other sources of donations not differentiated in US data: giving from other charities and charitable foundations, and donations gained from special fundraising activities, like galas or sponsorships. Only the latter-which is about half of the measured crowding out-represents a potential loss of dollars to the charitable sector as a result of government grants.
Keywords: charitable contributions; government grants; crowding out
JEL Codes: D64; H44; H5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| government grants (H81) | crowding out of private donations (L39) |
| government grants (H81) | reduced fundraising efforts by charities (D64) |
| government grants (H81) | revenue from special fundraising events (H27) |
| crowding out of private donations (L39) | changes in total private giving (D64) |