The Sensitivity of Charitable Giving to the Timing and Salience of Tax Credits

63 Pages Posted: 13 Feb 2019

See all articles by Ross D. Hickey

Ross D. Hickey

Simon Fraser University (SFU)

Bradley Minaker

Office of Institutional Analysis and Research

A. Abigail Payne

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; McMaster University, Department of Economics (On Leave)

Date Written: January 31, 2019

Abstract

If a taxpayer is able to claim charitable donations made near the time of filing her tax return, will she give more? To what extent does the salience of tax-induced incentives matter? This paper explores the role of the timing and salience of tax incentives on reported tax filer giving. As a result of the January 12, 2010 Haiti Earthquake, taxpayers in Quebec, Canada were given an opportunity to report donations that were made near the time of filing on their 2009 tax returns, while taxpayers located elsewhere in Canada were not given this opportunity. We find that moving the timing of reporting of gifts on one’s tax returns closer to the timing of giving increases average donations by approximately 9 percentage points. We discuss the policy implications of our results along with the implications for our understanding of the tax price elasticity of charitable giving.

Keywords: charitable giving, donations, disaster relief, tax incentives

JEL Classification: H0, H40, H84

Suggested Citation

Hickey, Ross D. and Minaker, Bradley and Payne, A. Abigail, The Sensitivity of Charitable Giving to the Timing and Salience of Tax Credits (January 31, 2019). Melbourne Institute Working Paper No. 02/19. Available at SSRN: https://ssrn.com/abstract=3333600 or http://dx.doi.org/10.2139/ssrn.3333600

Ross D. Hickey (Contact Author)

Simon Fraser University (SFU) ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

Bradley Minaker

Office of Institutional Analysis and Research ( email )

Guelph, Ontario
Canada

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 (On Leave) ( email )

Hamilton, Ontario L8S 4M4
Canada

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