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Effects of the Price of Charitable Giving: Evidence from an Online Crowdfunding Platform

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  • Jonathan Meer

Abstract

A long literature has examined the effects of the price of giving – that is, the amount an in-dividual must give for one dollar to accrue to the charitable activity itself – on donative behavior. We use data from DonorsChoose.org, an online platform linking teachers with prospective donors, that are uniquely suited to addressing this question due to exogenous variation in overhead costs. An increased price of giving results in a lower likelihood of a project being funded. We also calculate the price elasticity of giving, finding estimates between -0.8 and -2; these are likely to be upper bounds on the tax price elasticity of charitable donations. Finally, we examine the effect of competition on giving and find that increased competition reduces the likelihood of a project being funded. These results provide insight into the workings of the market for charitable gifts.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19082.

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Date of creation: May 2013
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Handle: RePEc:nbr:nberwo:19082

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  1. Baris Yoruk, 2013. "Charity ratings," Discussion Papers 13-05, University at Albany, SUNY, Department of Economics.
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