The Impact of Government Funded Initiatives on Charity Revenues

Bradley Minaker and A. Payne

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: When a charity receives government funding does it undo the benefits of that funding by changing its behavior for the collection of revenues from other sources? Do donors change their behavior? In recent years, the classic question of understanding crowd out from the charity perspective has been studied by numerous authors. This paper explores the extent to which a government funded program for new charity initiatives crowds out revenue from other sources. We explore 11,000+ applications by more than 4,500 charities for funding over a 10-year period. We demonstrate that the revenues of the charity increase approximately 16% and that the effect of the grant extends several years. The results suggest a change in charity behavior that potentially may dampen the full effect and/or persistence of the government funding.

Keywords: Charitable giving; crowd out (search for similar items in EconPapers)
JEL-codes: H4 (search for similar items in EconPapers)
Pages: 35pp
Date: 2017-09
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2017n24

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