Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes

41 Pages Posted: 5 May 2020 Last revised: 27 Dec 2021

See all articles by Tatyana Deryugina

Tatyana Deryugina

University of Illinois

Benjamin Marx

University of Illinois at Urbana-Champaign

Date Written: May 2020

Abstract

Do new societal needs increase charitable giving or simply reallocate a fixed supply of donations? We study this question using IRS datasets and the natural experiment of deadly tornadoes. Among ZIP Codes located more than 20 miles away from a tornado's path, donations by households increase by over $1 million per tornado fatality. We find no negative effects on charities located in these ZIP Codes, with a bootstrapped confidence interval that rejects substitution rates above 16 percent. The results imply that giving to one cause need not come at the expense of another.

Suggested Citation

Deryugina, Tatyana and Marx, Benjamin, Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes (May 2020). NBER Working Paper No. w27078, Available at SSRN: https://ssrn.com/abstract=3592156

Tatyana Deryugina (Contact Author)

University of Illinois ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

HOME PAGE: http://deryugina.com

Benjamin Marx

University of Illinois at Urbana-Champaign ( email )

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