Who's in Charge? Donor Targeting Enhances Voluntary Giving to Government

49 Pages Posted: 15 Jul 2013

See all articles by Sherry Xin Li

Sherry Xin Li

University of Texas at Dallas

Catherine C. Eckel

Texas A&M University

Philip J. Grossman

Monash University - Department of Economics

Tara Larson

University of Texas at Dallas

Date Written: March 29, 2013

Abstract

This paper investigates the potential effect of allowing donors to target voluntary giving to specific government organizations on government’s ability to generate additional revenues. We design a ‘real donation’ lab experiment to compare giving to general revenue with donor-targeted giving to specific causes. Results show that granting donors control over the use of their funds more than doubles giving to government. A comparison with private organizations that serve similar functions shows that targeting significantly shrinks the disadvantageous gap in voluntary contributions to government. We argue that creating new mechanisms to facilitate voluntary giving has the potential to enhance revenue during fiscal crisis, especially when donations can be targeted for specific programs.

Keywords: donor targeting, voluntary giving to government, lab experiment

JEL Classification: H2, D64, C91

Suggested Citation

Li, Sherry Xin and Eckel, Catherine C. and Grossman, Philip J. and Larson, Tara, Who's in Charge? Donor Targeting Enhances Voluntary Giving to Government (March 29, 2013). Available at SSRN: https://ssrn.com/abstract=2293407 or http://dx.doi.org/10.2139/ssrn.2293407

Sherry Xin Li

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Catherine C. Eckel (Contact Author)

Texas A&M University ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Philip J. Grossman

Monash University - Department of Economics ( email )

Wellington Road
Clayton, 3800
Australia
61399020052 (Phone)

Tara Larson

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

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