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Taking from charity? Political contributions and the market for charitable funds

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  • Karol, Stephanie

Abstract

How do charities respond to cyclical increases in competition from political campaigns? This paper is the first to estimate the elasticity of charities’ fundraising expenses to political contributions, and the first to use charity-level data to estimate the cross-elasticity of private charitable giving to political contributions. When political donations rise, they lead the average charity to cut back on fundraising. This is costly: political contributions crowd out private charitable giving at a rate of $0.37 per dollar. After netting out the negative effect of political contributions on fundraising, political giving crowds charitable giving in, rather than out. Substantial heterogeneity is documented across cause areas.

Suggested Citation

  • Karol, Stephanie, 2025. "Taking from charity? Political contributions and the market for charitable funds," Journal of Economic Behavior & Organization, Elsevier, vol. 230(C).
    • Handle: RePEc:eee:jeborg:v:230:y:2025:i:c:s0167268124004918
    DOI: 10.1016/j.jebo.2024.106877
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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