Are Charitable Donations and Volunteering Substitutes or Complements? New Evidence from Recent Tax Changes

Bradley T. Heim and Laura Montenovo

National Tax Journal, 2025, vol. 78, issue 3, 609 - 636

Abstract: We utilize Panel Study of Income Dynamics data spanning 2001–2019 to estimate the impact of recent changes in the after-tax price of monetary giving on volunteering. Across specifications, estimates decrease appreciably when within-individual over-time variation is utilized. We find that donations of time and money are complements on the extensive margin, though the effect size is modest, and generally find opposing but insignificant effects on the intensive margin. The results imply that raising the price of giving may reduce the number of individuals who volunteer, albeit modestly, though a small increase in hours among volunteers may offset this effect.

Date: 2025
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