Quality-Aware Tax Incentives for Charitable Contributions

Zachary Halberstam and James R. Hines

No 10250, CESifo Working Paper Series from CESifo

Abstract: This paper characterizes efficient tax subsidies for charitable contributions, and considers the properties of potential reforms. Contributions are underprovided in the absence of subsidies, and are misdirected if subsidies fail to account for all of the costs that donors incur. It is costly for prospective donors to identify high-quality giving opportunities, so there will be too few of these contributions if all giving receives the same tax treatment. A more efficient alternative is to offer generous tax subsidies that are partially or entirely recouped if recipient organizations subsequently experience precipitous contribution declines.

JEL-codes: H21 H41 L31 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-pbe
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