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What do gifts buy? A model of philanthropy and tithing based on prestige and warm glow

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Author Info

  • William T. Harbaugh

    (Univ. of Oregon)

Abstract

Charities publicize the donations they receive, generally according to dollar categories rather than the exact amount. Donors in turn tend to give the minimum amount necessary to get into a category. These facts suggest that donors have a taste for having their donations made public. This paper models the effects of such a taste for "prestige" on the behavior of donors and charities. I show how charities can increase donations by using categories. The paper also shows conditions under which tithing, or reporting donations as percentages of income, can maximize donations, and examines the effect of a taste for prestige on competition between charities.

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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 9606003.

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Length: 45 pages
Date of creation: 27 Jun 1996
Date of revision:
Handle: RePEc:wpa:wuwppe:9606003

Note: Type of Document - Word 6.0; prepared on IBM PC ; pages: 45; figures: included
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Web page: http://128.118.178.162

Related research

Keywords: nonprofit; philanthropy; public goods; altruism; tithing;

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References

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  1. McDonald, James B, 1984. "Some Generalized Functions for the Size Distribution of Income," Econometrica, Econometric Society, vol. 52(3), pages 647-63, May.
  2. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  3. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  4. Hollander, Heinz, 1990. "A Social Exchange Approach to Voluntary Cooperation," American Economic Review, American Economic Association, vol. 80(5), pages 1157-67, December.
  5. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
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Cited by:
  1. James Andreoni, 2006. "Leadership Giving in Charitable Fund-Raising," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 1-22, 01.
  2. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2001. "Why Announce Leadership Contributions? An Experimental Study of the Signaling and Reciprocity Hypotheses," Discussion Paper 2001-100, Tilburg University, Center for Economic Research.

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