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Do Government Subsidies To Nonprofits Crowd Out Donations or Donors?

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  • Arthur C. Brooks

    (Syracuse University)

Abstract

The traditional test of the public-goods crowding-out effect may mask important impacts of government subsidies on private giving because it confounds the effects of subsidies on average donation size versus their effects on the number of donors . Using panel data on the U.S. nonprofit sector, the author shows that, although increased public funding has a neutral effect on total donations, it is associated with decreased average donations but a larger pool of donors.

Suggested Citation

  • Arthur C. Brooks, 2003. "Do Government Subsidies To Nonprofits Crowd Out Donations or Donors?," Public Finance Review, , vol. 31(2), pages 166-179, March.
    • Handle: RePEc:sae:pubfin:v:31:y:2003:i:2:p:166-179
    DOI: 10.1177/1091142102250328
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    References listed on IDEAS

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    1. Clotfelter, Charles T., 1980. "Tax incentives and charitable giving: evidence from a panel of taxpayers," Journal of Public Economics, Elsevier, vol. 13(3), pages 319-340, June.
    2. Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
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    7. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
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    10. Clotfelter, Charles T, 1980. "Tax Incentives and Charitable Giving: Evidence from a Panel of Taxpayers," Empirical Economics, Springer, vol. 13(3), pages 319-340, June.
    11. Lawrence B. Lindsey & Richard Steinberg, 1990. "Joint Crowdout: An Empirical Study of the Impact of Federal Grants on State Government Expenditures and Charitable Donations," NBER Working Papers 3226, National Bureau of Economic Research, Inc.
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    Cited by:

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    2. Thomas A. Garrett & Russell M. Rhine, 2007. "Does government spending really crowd out charitable contributions? new time series evidence," Working Papers 2007-012, Federal Reserve Bank of St. Louis.
    3. Chang Woon Nam & Peter Steinhoff, 2019. "The Role of Volunteers in German Refugee Crisis and Their Contribution to Local Government Expenditure," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 20(03), pages 25-30, October.
    4. Orkhan ISMAYILOV, 2016. "Flypaper Nonprofits: Crowding In And Crowding Out Effects Of Grants On Nonprofit Finance," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 77-87, December.
    5. Helms, Sara E. & Thornton, Jeremy P., 2012. "The influence of religiosity on charitable behavior: A COPPS investigation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 373-383.
    6. Orkhan ISMAYILOV, 2016. "Flypaper Nonprofits: Crowding In And Crowding Out Effects Of Grants On Nonprofit Finance," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 77-87, December.
    7. Willems, Jurgen, 2019. "Leadership, Performance, and Reputation: A multi-method empirical view on the public and nonprofit sectors - Habilitation Synopsis," OSF Preprints np9e3, Center for Open Science.

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