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Do tax credits benefit charities? Evidence from two states

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  • Anubhav Gupta
  • Thomas Luke Spreen

Abstract

This paper considers the effect of state charitable giving tax credits on the contribution revenues of eligible charities. Using event studies paired with Form 990 data, we detect no significant change in contributions to qualified nonprofits after the elimination of a $100 per taxpayer credit by Michigan. By contrast, we find a significant increase in contributions to qualified charities following the introduction of a $10,000 per taxpayer credit by North Dakota that persists for several years. The results suggest that placing a large cap on charitable giving tax credits induces stronger donor responses.

Suggested Citation

  • Anubhav Gupta & Thomas Luke Spreen, 2024. "Do tax credits benefit charities? Evidence from two states," Contemporary Economic Policy, Western Economic Association International, vol. 42(1), pages 94-109, January.
    • Handle: RePEc:bla:coecpo:v:42:y:2024:i:1:p:94-109
    DOI: 10.1111/coep.12622
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    References listed on IDEAS

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