Is crowding out due entirely to fundraising? Evidence from a panel of charities

Abstract

When the government gives a gr ant to a private charitable organization, do the donors to that organization give less? If they do, is it because the grants crowd out donors who feel they gave through taxes (classic crowd out), or is it because the grant crowds out the fundraising of the charities who, after getting the grant, reduce efforts of fundraising (fundraising crowd-out)? This is the first paper to separate these two effects. Using a panel of more than 8000 charities, we find that crowding out is significant, at about 75%. We find this crowding out is due primarily to reduced fundraising. Depending on which types of organizations are included in the analysis, crowding out attributabl..