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


  • Patricia Hughes
  • William Luksetich
  • Patrick Rooney

    () (Department of Economics, St. Cloud State University)


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.

Suggested Citation

  • Patricia Hughes & William Luksetich & Patrick Rooney, 2012. "Crowding –Out and Fundraising Efforts: The impact of government grants on Symphony Orchestras," Working Papers 2012-24, Saint Cloud State University, Department of Economics.
  • Handle: RePEc:scs:wpaper:1224

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    Crowding-Out; Fundraising; Government Grants; Symphony Orchestras;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy

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