Toward a Theory of Charitable Fund-Raising
University of California, San Diego (UCSD)
Journal of Political Economy, Vol. 106, No. 6, December 1998
Private providers of public goods, such as charities, invariably enlist fund-raisers to organize and collect contributions. Common in charitable fund-raising is seed money, either from a government grant or from a group of "leadership givers," that launches the fund drive and generates additional gifts. This paper provides a theoretical basis for fund-raisers and seeds to charity. The primary assumption is that there is a range of increasing returns at low levels of provision of the public good. It is shown that fund-raisers have a natural and important role, and that sometimes only a small amount of seed money can grow into a substantial charity.
JEL Classification: H41, H49
Date posted: November 11, 1998
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