The Impact of Government Funded Initiatives on Charity Revenues

35 Pages Posted: 20 Sep 2017

See all articles by Bradley Minaker

Bradley Minaker

University of Guelph

A. Abigail Payne

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

Date Written: September 19, 2017

Abstract

When a charity receives government funding does it undo the benefits of that funding by changing its behavior for the collection of revenues from other sources? Do donors change their behavior? In recent years, the classic question of understanding crowd out from the charity perspective has been studied by numerous authors. This paper explores the extent to which a government funded program for new charity initiatives crowds out revenue from other sources. We explore 11,000 applications by more than 4,500 charities for funding over a 10-year period. We demonstrate that the revenues of the charity increase approximately 16% and that the effect of the grant extends several years. The results suggest a change in charity behavior that potentially may dampen the full effect and/or persistence of the government funding.

Keywords: Charitable Giving, Crowd Out

JEL Classification: H4

Suggested Citation

Minaker, Bradley and Payne, A. Abigail, The Impact of Government Funded Initiatives on Charity Revenues (September 19, 2017). Melbourne Institute Working Paper No. 24/17. Available at SSRN: https://ssrn.com/abstract=3039827 or http://dx.doi.org/10.2139/ssrn.3039827

Bradley Minaker

University of Guelph ( email )

Guelph, Ontario
Canada

A. Abigail Payne (Contact Author)

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

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