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The geography of giving: The effect of corporate headquarters on local charities

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Author Info

  • Card, David
  • Hallock, Kevin F.
  • Moretti, Enrico

Abstract

Does the presence of corporate headquarters in a city affect the incomes of local charities? To address this question we combine data on the head office locations of publicly traded U.S. firms with information on the receipts of local charitable organizations. Cities like Houston, San Jose, and San Francisco gained significant numbers of corporate headquarters over the past two decades, while cities like Chicago and Los Angeles lost. Our analysis suggests that attracting or retaining the headquarters of a publicly traded firm yields approximately $3-10Â million per year in contributions to local non-profits. Likewise, each $1000 increase in the market value of the firms headquartered in a city yields $0.60-1.60 to local non-profits. Most of the increase in charitable contributions is attributable to an effect on the number of highly-compensated individuals in a city, rather than through direct donations by the corporations themselves. The increased private sector donations from the presence of corporate headquarters do not seem to crowd out government grants to local charities.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 94 (2010)
Issue (Month): 3-4 (April)
Pages: 222-234

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Handle: RePEc:eee:pubeco:v:94:y:2010:i:3-4:p:222-234

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: Non-profits Corporate location Donations;

References

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  1. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  2. Brown, William O. & Helland, Eric & Smith, Janet Kiholm, 2006. "Corporate philanthropic practices," Journal of Corporate Finance, Elsevier, vol. 12(5), pages 855-877, December.
  3. Boatsman, James R. & Gupta, Sanjay, 1996. "Taxes and Corporate Charity: Empirical Evidence from Micro Level Panel Data," National Tax Journal, National Tax Association, vol. 49(2), pages 193, June.
  4. Moretti, Enrico, 2004. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," Santa Cruz Department of Economics, Working Paper Series qt5cz0h23t, Department of Economics, UC Santa Cruz.
  5. James Andreoni & A. Abigail Payne, 2003. "Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?," American Economic Review, American Economic Association, vol. 93(3), pages 792-812, June.
  6. Susan Rose-Ackerman, 1996. "Altruism, Nonprofits, and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 701-728, June.
  7. J Vernon Henderson & James Davis, 2004. "The Agglomeration of Headquarters," Working Papers 04-02, Center for Economic Studies, U.S. Census Bureau.
  8. Boatsman, James R. & Gupta, Sanjay, 1996. "Taxes and Corporate Charity: Empirical Evidence from Micro-Level Panel Data," National Tax Journal, National Tax Association, vol. 49(2), pages 193-213, June.
  9. repec:att:wimass:9712 is not listed on IDEAS
  10. Becker, Elizabeth & Lindsay, Cotton M, 1994. "Does the Government Free Ride?," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 277-96, April.
  11. James Andreoni, 1998. "Toward a Theory of Charitable Fund-Raising," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1186-1213, December.
  12. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
  13. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  14. Thomas Klier & William Testa, 2002. "Location trends of large company headquarters during the 1990s," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 12-26.
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Cited by:
  1. Theodoros M. Diasakos & Florence Neymotin, 2014. "Coordination in Public Good Provision: How Individual Volunteering is Impacted by the Volunteering of Others," Discussion Paper Series, Department of Economics 201402, Department of Economics, University of St. Andrews.

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