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Joint Supply and the Finance of Charitable Activity

Author

Listed:
  • John Posnett

    (University of York)

  • Todd Sandler

    (Iowa State University)

Abstract

This article puts forth a joint-supply model of charity, in which the purchase of a private good yields excess revenues used to finance a public charitable output. Joint supply is an especially effective fund-raising technique when the private and public goods are Hicksian complements. Competitive advantages, gained through tax-exempt status, also allow charities to outcompete for-profit competitors. Evidence drawn from U. K. charities demonstrates that large successful charities generate a sizable portion of revenues from direct-trading activities.

Suggested Citation

  • John Posnett & Todd Sandler, 1986. "Joint Supply and the Finance of Charitable Activity," Public Finance Review, , vol. 14(2), pages 209-222, April.
    • Handle: RePEc:sae:pubfin:v:14:y:1986:i:2:p:209-222
    DOI: 10.1177/109114218601400206
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    References listed on IDEAS

    as
    1. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-148, February.
    2. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-598, September.
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    Cited by:

    1. Andreas Löschel & Dirk T.G. Rübbelke, 2009. "Impure public goods and technological interdependencies," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 36(6), pages 596-615, October.
    2. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    3. Steinberg, Richard S., 1991. "'Unfair' Competition by Nonprofits and Tax Policy," National Tax Journal, National Tax Association;National Tax Journal, vol. 44(3), pages 351-364, September.
    4. repec:ebl:ecbull:v:10:y:2002:i:1:p:1-14 is not listed on IDEAS
    5. Dennis Coates, 1998. "Public Sector Crowding Out of Private Provision of Public Goods: the Influence of Differences in Production Costs," Public Finance Review, , vol. 26(5), pages 460-479, September.
    6. Pecorino, Paul, 2010. "By-product lobbying with rival public goods," European Journal of Political Economy, Elsevier, vol. 26(1), pages 114-124, March.
    7. Paul Pecorino, 2013. "Monopolistic Competition and Public Good Provision with By‐product Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 875-893, December.
    8. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August.
    9. Hamlett, Cathy A., 1987. "Private provision of local rural roads," ISU General Staff Papers 198701010800009541, Iowa State University, Department of Economics.
    10. Tammy Leonard, 2016. "Housing Upkeep and Public Good Provision in Residential Neighborhoods," Housing Policy Debate, Taylor & Francis Journals, vol. 26(6), pages 888-908, November.
    11. Vicary, Simon, 1997. "Joint production and the private provision of public goods," Journal of Public Economics, Elsevier, vol. 63(3), pages 429-445, February.
    12. Akram Temimi, 2001. "Does Altruism Mitigate Free-riding and Welfare Loss?," Economics Bulletin, AccessEcon, vol. 8(5), pages 1-8.
    13. Andreas Löschel & Jiansuo Pei & Ran Wang & Bodo Sturm & Wolfgang Buchholz & Zhongxiu Zhao, 2021. "The Demand for Global and Local Environmental Protection: Experimental Evidence from Climate Change Mitigation in Beijing," Land Economics, University of Wisconsin Press, vol. 97(1), pages 137-154.
    14. Richard Steinberg, 1986. "Charitable Giving as a Mixed Public/Private Good: Implications for Tax Policy," Public Finance Review, , vol. 14(4), pages 415-431, October.
    15. Pecorino, Paul, 2001. "Can by-product lobbying firms compete?," Journal of Public Economics, Elsevier, vol. 82(3), pages 377-397, December.
    16. Steinberg, Richard S., 1991. "'Unfair' Competition by Nonprofits and Tax Policy," National Tax Journal, National Tax Association, vol. 44(3), pages 351-64, September.
    17. Anil Markandya & Dirk T.G. Rübbelke, 2012. "Impure public technologies and environmental policy," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 39(2), pages 128-143, May.
    18. Philip Jones, 2004. "‘All for One and One for All’: Transactions Cost and Collective Action," Political Studies, Political Studies Association, vol. 52(3), pages 450-468, October.
    19. James C. Murdoch & Morteza Rahmatian & Mark A. Thayer, 1993. "A Spatially Autoregressive Median Voter Model of Recreation Expenditures," Public Finance Review, , vol. 21(3), pages 334-350, July.
    20. Brumme, Anja, 2019. "Introducing a "green" good: Implications for environmental quality and social welfare," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203655, Verein für Socialpolitik / German Economic Association.
    21. Carrie A. Meyer, 1996. "NGOs and Environmental Public Goods: Institutional Alternatives to Property Rights," Development and Change, International Institute of Social Studies, vol. 27(3), pages 453-474, July.
    22. Marianne F. Johnson, 2003. "Differential Taxation of for-Profit and Nonprofit Firms: A Computational General Equilibrium Approach," Public Finance Review, , vol. 31(6), pages 623-647, November.
    23. Smith, Vincent H. & Kehoe, Michael R. & Cremer, Mary E., 1995. "The private provision of public goods: Altruism and voluntary giving," Journal of Public Economics, Elsevier, vol. 58(1), pages 107-126, September.
    24. Paul Pecorino, 2016. "A Portion of Profits to Charity: Corporate Social Responsibility and Firm Profitability," Southern Economic Journal, John Wiley & Sons, vol. 83(2), pages 380-398, October.

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