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The extent to which government grants to nonprofit organizations crowd-out or crowd-in private giving to them: An unresolved debate revisited within a strategic fundraising setting

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  • Gayle, Philip

Abstract

This study examines the extent to which government grants to nonprofits crowd-out or crowd-in private giving to them. Grants influence private giving via two channels: (i) “directly” through donors’ preference-induced optimal change in their giving in response to the grants; and (ii) “indirectly” through nonprofits’ optimally changing their fundraising efforts, which in turn influence private giving. I use a structural model that disentangles the two channels and explains the mixed empirical results in the literature on the crowd-out/crowd-in hypothesis. Relative strengths of the “direct” and “indirect” channels depend on the presence of strategic interaction among nonprofits with respect to fundraising.

Suggested Citation

  • Gayle, Philip, 2024. "The extent to which government grants to nonprofit organizations crowd-out or crowd-in private giving to them: An unresolved debate revisited within a strategic fundraising setting," MPRA Paper 120685, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:120685
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    More about this item

    Keywords

    Nonprofit Organizations; Crowd-out; Crowd-in; Government Grants; Private Donations; Fundraising;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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