Do Grants to Charities Crowd Out Other Income? Evidence from the UK

41 Pages Posted: 28 Apr 2013

See all articles by James Andreoni

James Andreoni

University of California, San Diego (UCSD)

A. Abigail Payne

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; McMaster University, Department of Economics

Sarah Smith

University of Bristol; Institute for Fiscal Studies (IFS)

Date Written: April 2013

Abstract

We present new evidence on the effect of grants on charities' incomes. We employ a novel identification strategy, focusing on charities that applied for lottery grant funding and comparing outcomes for successful and unsuccessful applicants. Overall, grants do not crowd out other income but the effect of grant-funding is not uniform. Looking in more detail we show first, that the positive effects of receiving a grant can persist for several years post-award; second, that grants have a stronger positive effect for small charities; and, third, that grants may have a more positive effect when they provide seed funding.

Suggested Citation

Andreoni, James and Payne, A. Abigail and Smith, Sarah, Do Grants to Charities Crowd Out Other Income? Evidence from the UK (April 2013). NBER Working Paper No. w18998. Available at SSRN: https://ssrn.com/abstract=2257188

James Andreoni (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

HOME PAGE: http://econ.ucsd.edu/~jandreon/

A. Abigail Payne

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5 111 Barry Street
Carlton, Victoria 3010
Australia
+61 3 9035 4219 (Phone)

McMaster University, Department of Economics ( email )

Hamilton, Ontario L8S 4M4
Canada

Sarah Smith

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, BS8 ITH
United Kingdom

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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