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Altruistic and Joy-of-Giving Motivations in Charitable Behavior

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Author Info
David C. Ribar
Mark O. Wilhelm

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Abstract

This study theoretically and empirically examines altruistic and joy-of-giving motivations underlying contributions to charitable activities. The theoretical analysis shows that in an economy with an infinitely large number of donors, impurely altruistic preferences lead to either asymptotically zero or complete crowd-out. The paper then establishes conditions on preferences that are sufficient to yield zero crowd-out in the limit. These conditions are fairly weak and quite plausible. An empirical representation of the model is estimated using a new 198692 panel of donations and government funding from the United States to 125 international relief and development organizations. Besides directly linking sources of public and private support, the econometric analysis controls for unobserved institution-specific factors, institution-specific changes in leadership, year-to-year changes in need, and expenditures by related organizations. The estimates show little evidence of crowd-out from either direct public or related private sources. Thus, at the margin, donations to these organizations appear to be motivated solely by joy-of-giving preferences. In addition to addressing the basic question of motives behind charitable giving, the results help explain the existing disparity between econometric and experimental crowd-out estimates.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 110 (2002)
Issue (Month): 2 (April)
Pages: 425-457
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Handle: RePEc:ucp:jpolec:v:110:y:2002:i:2:p:425-457

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  1. Rachel M. McCleary & Robert J. Barro, 2006. "U.S.-Based Private Voluntary Organizations: Religious and Secular PVOs Engaged in International Relief & Development," NBER Working Papers 12238, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Bruno S. Frey & Stephan Meier, . "The Economics of Museums," IEW - Working Papers iewwp149, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  3. Johansson-Stenman, Olof, 2004. "Global environmental problems, efficiency and limited altruism," Working Papers in Economics 139, Göteborg University, Department of Economics. [Downloadable!]
    Other versions:
  4. Peter Nunnenkamp & Janina Weingarth & Johannes Weisser, 2008. "Is NGO Aid Not So Different After All? Comparing the Allocation of Swiss Aid by Private and Official Donors," Kiel Working Papers 1405, Kiel Institute for the World Economy. [Downloadable!]
  5. Sonia Manzoor & John Straub, 2005. "The robustness of Kingma’s crowd-out estimate: Evidence from new data on contributions to public radio," Public Choice, Springer, vol. 123(3), pages 463-476, June. [Downloadable!] (restricted)
  6. James Andreoni & Abigail Payne, 2007. "Crowding out Both Sides of the Philanthropy Market: Evidence from a Panel of Charities," Levine's Bibliography 122247000000001769, UCLA Department of Economics. [Downloadable!]
  7. Dean Karlan & John A. List, 2006. "Does Price Matter in Charitable Giving? Evidence From a Large-Scale Natural Field Experiment," NBER Working Papers 12338, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Hackl, Franz & Halla, Martin & Pruckner, Gerald J., 2009. "Volunteering and the State," IZA Discussion Papers 4016, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Daniel M. Hungerman, 2007. "Diversity and Crowd-out: A Theory of Cold-Glow Giving," NBER Working Papers 13348, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Dirk-Jan Koch & Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Keeping a Low Profile: What Determines the Allocation of Aid by Non-Governmental Organizations?," Kiel Working Papers 1406, Kiel Institute for the World Economy. [Downloadable!]
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  11. Stephan Meier, 2006. "Do subsidies increase charitable giving in the long run?: matching donations in a field experiment," Working Papers 06-18, Federal Reserve Bank of Boston. [Downloadable!]
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  12. Kentaro Hatsumi, 2009. "A Coordination Game Model of Charitable Giving and Seed Money Effect," ISER Discussion Paper 0736r, Institute of Social and Economic Research, Osaka University, revised Sep 2009. [Downloadable!]
  13. Stephan Meier & Alois Stutzer, . "Matching Donations - Subsidizing Charitable Giving in a Field Experiment," IEW - Working Papers iewwp181, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  14. Kentaro Hatsumi, 2009. "A Coordination Game Model of Charitable Giving and Seed Money Effect," ISER Discussion Paper 0736, Institute of Social and Economic Research, Osaka University. [Downloadable!]
  15. Buraschi, Andrea & Cornelli, Francesca, 2002. "Donations," CEPR Discussion Papers 3488, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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