Does the NEA Crowd Out Private Charitable Contributions to the Arts?

Jane K. Dokko

National Tax Journal, 2009, vol. 62, issue 1, 57-75

Abstract: This paper investigates the mechanism by which the federal government’s funding of the arts through the National Endowment for the Arts (NEA) displaces private charitable contributions to non–profit arts organizations. I estimate that private charitable contributions to arts organizations increased by 50 to 60 cents due to a major funding cut to the NEA during the mid–1990s. These increases, however, also coincided with, on average, a 25 cent increase in fund–raising expenditures by arts organizations for every dollar decrease in government grants. The estimate of crowding out found in this paper is relatively large, particularly for a study using a micro–data set. I argue that an appropriate interpretation of an estimate of a crowding–out parameter, in general, depends crucially on the context.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:62:y:2009:i:1:p:57-75

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