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Charitable Giving and Intermediation

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  • Nadine Chlaß
  • Lata Gangadharan
  • Kristy Jones

Abstract

Charitable donations are often made through intermediaries who can fund themselves from these same donations. Donors who purchase charitable output through an intermediary incur a principal-agent problem with unobservable prices. We compare charitable giving in an experiment with and without intermediation. Overall, donors give less when an intermediary is introduced, a decision which can only be partly explained by donors’ beliefs about the price of charitable output. However, this overall result can be attributed to only 41 per-cent of all donors. 59 per-cent of all donors in fact give as much or more with than without intermediation. Responses to intermediation can be explained by characteristics of donors’ moral judgment.

Suggested Citation

  • Nadine Chlaß & Lata Gangadharan & Kristy Jones, 2015. "Charitable Giving and Intermediation," Monash Economics Working Papers 18-15, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2015-18
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    3. Adena, Maja & Huck, Steffen, 2019. "Personalized fundraising: A field experiment on threshold matching of donations," Discussion Papers, Research Unit: Economics of Change SP II 2019-306, WZB Berlin Social Science Center.
    4. Adena, Maja & Alizade, Jeyhun & Bohner, Frauke & Harke, Julian & Mesters, Fabio, 2019. "Quality certification for nonprofits, charitable giving, and donor's trust: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 75-100.
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    6. Butera, Luigi & Houser, Daniel, 2018. "Delegating altruism: Toward an understanding of agency in charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 99-109.
    7. Benjamin Bittschi & Sarah Borgloh & Berthold U. Wigger, 2020. "Philanthropy in a Secular Society," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 176(4), pages 640-664.
    8. Luca Corazzini & Christopher Cotton & Tommaso Reggiani, 2020. "Delegation and coordination with multiple threshold public goods: experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1030-1068, December.
    9. Portillo, Javier E. & Stinn, Joseph, 2018. "Overhead aversion: Do some types of overhead matter more than others?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 40-50.

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    More about this item

    Keywords

    charitable giving; altruism; intermediation; charitable institutions; price elasticity; moral judgment reasoning;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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