Public Funding of Charities and Competitive Charity Selection
AbstractEvidence on the price elasticity of private donations to charities and on the crowding out effect of donations by government grants suggests that a redirection of government funds from tax incentives for giving towards direct grants could increase total charity funding. This raises the question of why tax incentives for giving are used instead of direct grants. This paper shows that if government grants to charities face verification constraints, switching from direct grants to donation incentives can produce a pro-competitive effect on charity selection, raising the value of charity provision per dollar of funding.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7937.
Date of creation: Aug 2010
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Find related papers by JEL classification:
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
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