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

Patricia Hughes, William Luksetich and Patrick Rooney ()
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Patrick Rooney: Department of Economics, St. Cloud State University

No 2012-24, Working Papers from Saint Cloud State University, Department of Economics

Abstract: 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.

Keywords: Crowding-Out; Fundraising; Government Grants; Symphony Orchestras (search for similar items in EconPapers)
JEL-codes: D22 L31 L38 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:scs:wpaper:1224

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