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Regulating European grant-making foundations. Lessons from the USA experience?

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  • Barbetta, Gian Paolo
  • Colombo, Luca
  • Turati, Gilberto

Abstract

Grant-making foundations are private institutions that distribute their income to deserving organisations. In the USA, they enjoy fiscal incentives, but have to comply with complex rules securing that incentives are well deserved. In contrast, European countries have an embryonic legislation. This paper investigates whether the different tax rules adopted in the USA for independent and community foundations influence the grant-making behaviour of these organisations. Our econometric investigation underlines the existence of a large heterogeneity in the activities of both types, suggesting that the introduction of new regulations could benefit from a careful analysis of the nature and the features of these organisations.

Suggested Citation

  • Barbetta, Gian Paolo & Colombo, Luca & Turati, Gilberto, 2015. "Regulating European grant-making foundations. Lessons from the USA experience?," Journal of Policy Modeling, Elsevier, vol. 37(5), pages 763-781.
    • Handle: RePEc:eee:jpolmo:v:37:y:2015:i:5:p:763-781
    DOI: 10.1016/j.jpolmod.2015.07.001
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    References listed on IDEAS

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    1. Andreoni, James & Payne, A. Abigail, 2011. "Is crowding out due entirely to fundraising? Evidence from a panel of charities," Journal of Public Economics, Elsevier, vol. 95(5), pages 334-343.
    2. Sansing, Richard & Yetman, Robert, 2006. "Governing private foundations using the tax law," Journal of Accounting and Economics, Elsevier, vol. 41(3), pages 363-384, September.
    3. McDonald, Bruce D. & Miller, D. Ryan, 2010. "Welfare programs and the state economy," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 719-732, November.
    4. Salvatore, Dominick, 2002. "Relative taxation and competitiveness in the European Union: what the European Union can learn from the United States," Journal of Policy Modeling, Elsevier, vol. 24(4), pages 401-410, July.
    5. James Andreoni & A. Abigail Payne, 2003. "Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?," American Economic Review, American Economic Association, vol. 93(3), pages 792-812, June.
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    Cited by:

    1. Afik, Zvika & Katz, Hagai, 2019. "Reconsidering the philanthropic foundation minimum payout policy under a “new normal”," Journal of Policy Modeling, Elsevier, vol. 41(2), pages 219-233.

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    More about this item

    Keywords

    Community foundations; Independent foundations; Minimum Payout Requirement; Public Support Test; Grant-making behaviour;
    All these keywords.

    JEL classification:

    • H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • K29 - Law and Economics - - Regulation and Business Law - - - Other

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