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Crowding out and Crowding in of Private Donations and Government Grants

Published on Mar 1, 2014in Public Finance Review
· DOI :10.1177/1091142112447525
Garth Heutel15
Estimated H-index: 15
(UNCG: University of North Carolina at Greensboro)
Abstract
A large literature examines the interaction of private and public funding of charities, much of it testing if public funding crowds out private funding. In this article, the author looks for two alternative phenomena using a large panel data set gathered from nonprofit organizations’ tax returns. First, the author looks for crowding out in the opposite direction: increased private funding may cause reduced public funding. Second, the author tests whether one type of funding acts as a signal of charity quality and thus crowds in other funding. The author finds evidence that government grants crowd in private donations. Crowding in is larger for younger charities. This is consistent with signaling, if donors know less about younger charities and the signal value is stronger. The author finds no evidence of an effect of private donations on government grants.
  • References (32)
  • Citations (36)
References32
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#2A. Abigail Payne (McMaster University)H-Index: 18
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We examine the effects of U.S. federal land programs on private conservation using county-level panel regressions. Private conservation data measure acres held by The Nature Conservancy (TNC) and by participants in Land Trust Alliance (LTA) censuses. Government data measure federal landholdings (e.g., national parks and forests) and enrollment in the Conservation and Wetland Reserves (CRP and WRP). We find a small crowding-out effect from the CRP on LTA trusts. With TNC, we find crowding in from...
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It is difficult for public agencies to make optimal reserve-site selections without knowing how new public reserves might influence the configuration of private conservation. Private land trusts protect much land in the USA, but little is known about how private groups respond to conservation decisions made by other conservation agents. To fill that gap, we analyze township-level spatial data on conservation in California, Illinois, and Massachusetts to explore relationships between the location...
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#1Jeffrey R. BrownH-Index: 36
#2Amy Finkelstein (MIT: Massachusetts Institute of Technology)H-Index: 43
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#1Jonathan Gruber (MIT: Massachusetts Institute of Technology)H-Index: 69
#2Daniel M. Hungerman (ND: University of Notre Dame)H-Index: 13
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#1Thomas A. Garrett (Federal Reserve Bank of St. Louis)H-Index: 22
#2Russell M. Rhine (St. Mary's College of Maryland)H-Index: 5
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#1Craig E. Landry (ECU: East Carolina University)H-Index: 20
#2Andreas Lange (UMD: University of Maryland, College Park)H-Index: 21
Last. Nicholas G. Rupp (ECU: East Carolina University)H-Index: 13
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This study develops theory and uses a door-to-door fundraising field experiment to explore the economics of charity. We approached nearly 5000 households, randomly divided into four experimental treatments, to shed light on key issues on the demand side of charitable fundraising. Empirical results are in line with our theory: in gross terms, our lottery treatments raised considerably more money than our voluntary contributions treatments. Interestingly, we find that a one standard deviation incr...
280 CitationsSource
#1Andreas Lange (UMD: University of Maryland, College Park)H-Index: 21
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