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Crowding –Out and Fundraising Efforts: The impact of government grants on Symphony Orchestras

Listed author(s):
  • Patricia Hughes
  • William Luksetich
  • Patrick Rooney


    (Department of Economics, St. Cloud State University)

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    The crowding-out of private donations by government grants is an integral element in designing an efficient method of financing nonprofit activity. This paper looks at elements of crowd-out, both the direct impact on donors and the indirect impact due to the response of nonprofits. We include both a theoretical and empirical analysis of the reactions by donors and nonprofits to an increase in government funding based on data from the League of American Orchestras’ annual reports from 2004-2007. To combat indirect crowd-out, renewed emphasis should be placed on grant design; for direct crowd-out, theories of collective action are appropriate.

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    Paper provided by Saint Cloud State University, Department of Economics in its series Working Papers with number 2012-24.

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    Date of creation: 2012
    Handle: RePEc:scs:wpaper:1224
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