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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 Heutel13
Estimated H-index: 13
(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 (30)
References32
Newest
#1Heidi J. Albers (OSU: Oregon State University)H-Index: 21
#2Amy W. Ando (UIUC: University of Illinois at Urbana–Champaign)H-Index: 18
Last.Xiaoxuan Chen (HSBC)H-Index: 2
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#1Suman Ghosh (FAU: Florida Atlantic University)H-Index: 9
#2Alexander Karaivanov (SFU: Simon Fraser University)H-Index: 8
Last.Mandar Oak (Williams College)H-Index: 8
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#1Thomas A. Garrett (Federal Reserve Bank of St. Louis)H-Index: 21
#2Russell M. Rhine (St. Mary's College of Maryland)H-Index: 5
Cited By30
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#1Pablo de Andrés-Alonso (Complutense University of Madrid)H-Index: 10
#2Inigo Garcia‐Rodriguez (UBU: University of Burgos)
Last.M. Elena Romero-Merino (UBU: University of Burgos)H-Index: 4
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#1Claire van Teunenbroek (VU: VU University Amsterdam)H-Index: 1
#2R.H.F.P. Bekkers (VU: VU University Amsterdam)H-Index: 23
Last.Bianca Beersma (VU: VU University Amsterdam)H-Index: 21
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#1Corey Lang (URI: University of Rhode Island)H-Index: 8
#2Patrick Prendergast (URI: University of Rhode Island)
Last.Shanna Pearson-Merkowitz (URI: University of Rhode Island)H-Index: 10
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