Trust, Ability-to-Pay, and Charitable Giving

Paul Missios and Ida Ferrara

No 61, Working Papers from Toronto Metropolitan University, Department of Economics

Abstract: In the literature on privately provided public goods, altruism has been motivated by what contributions can accomplish (public goods philanthropy), by the pleasure of giving (warm-glow philanthropy), or by the desire to personally make a difference (impact philanthropy). We revisit these motives but allow for income heterogeneity and distrust in the institutional structures involved. We also model socially motivated philanthropy when income-heterogeneous donors take trust and ability-to-pay into account. We show key differences across the four models in terms of crowding out and in the effects of income distribution. In the socially motivated model, low-income donors may contribute more than high-income donors, giving theoretical foundation to the frequently observed "U-shaped" pattern of giving.

Keywords: Philanthropy; Social Motivation; Trust; Ability to Pay; Crowding Out. (search for similar items in EconPapers)
JEL-codes: D03 H31 H41 Q53 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2015-11
New Economics Papers: this item is included in nep-cbe, nep-hme and nep-soc
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Related works:
Journal Article: Trust, ability‐to‐pay, and charitable giving (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rye:wpaper:wp061

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