Crowding Oot: The Effect of Government Grants on Donors, Fundraisers, and Foundations in Canada

James Andreoni and A. Payne

Department of Economics Working Papers from McMaster University

Abstract: Using data from charitable organizations in the US, authors have established that government grants to charities largely crowd out giving from other sources, but that this reduction is due mostly to reduced fundraising activities of the charity itself. We use much more detailed data from over 13,000 charities in Canada, measured for up to 15 years, to provide valuable new insights into this phenomenon. In particular, dollars received from individuals would increase with an increase in government grants if fundraising expenditures were held constant. Non-tax receipted giving from fundraising would decrease. A good portion of the crowd-out is attributable to giving from other institutions, such as foundations and other charities. The effect from this measure, about one-third of the measured crowding out—represents a potential loss of dollars to the charitable sector as a result of government grants.

JEL-codes: H00 H32 H50 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013-07
New Economics Papers: this item is included in nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2013-10

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