Altruistic and Joy‐of‐Giving Motivations in Charitable Behavior

Abstract

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. This study theoretically and empirically examines altruistic and joyof-giving motivations underlying contributions to charitable activities. The theoretical analysis shows that in an economy with an infinitely large number of donors, impurely altruistic preferences lead to either asymptotically zero or complete crowd-out. The paper then establishes conditions on preferences that are sufficient to yield zero crowd-out in the limit. These conditions are fairly weak and quite plausible. An empirical representation of the model is estimated using a new 1986-92 panel of donations and government funding from the United States to 125 international relief and development organizations. Besides directly linking sources of public and private support, the econometric analysis controls for unobserved institution-specific factors, institution-specific changes in leadership, year-to-year changes in need, and expenditures by related organizations. The estimates show little evidence of crowd-out from either direct public or related private Earlier versions of this paper titled "An Empirical Test of Altruistic and Joy-of-Giving Motivations in Charitable Behavior" were presented at the 1995 American Economic Association meetings in Washington, D.C., and the 1995 meetings of the Association for Research on Nonprofit Organizations and Voluntary Action in Cleveland. We thank Jennjou Chen, Hongshu Han, Dan Henry, Tammy Kolbe, Rob Poulton, Randy Sherrod, and Yinghui Zhu for excellent research assistance and Rick Bond, Tom Gresik, Norm Swanson, Al Slivinski, Rich Steinberg, the editor, and an anonymous referee as well as seminar participants at George Washington, Indiana University-Purdue University at Indianapolis, Indiana, and Penn State for helpful comments and discussions. We also wish to thank staff at the Center for Research on the Epidemiology of Disasters (University College London-Brussels) and the U.S. Agency for International Development for providing various data and answering questions. sources. Thus, at the margin, donations to these organizations appear to be motivated solely by joy-of-giving preferences. In addition to addressing the basic question of motives behind charitable giving, the results help explain the existing disparity between econometric and experimental crowd-out estimates. The University of Chicago Press

Government Support and Charitable Donations: A Meta-Analysis of the Crowding-out Hypothesis

“…Furthermore, it has been argued that crowding-out effects vary with the level of government support (Borgonovi 2006;Brooks 2000bBrooks , 2003b, the salience of the tax (Eckel, Grossman, and Johnston 2005), the number of other donors (Ribar and Wilhelm 2002), the difference between public goods that are generally provided by public funding and public goods that are generally provided by private funding (Tinkelman 2010), the linearity of the cost function of public good production (Tinkelman 2010), the number of people that initially do not contribute to a public good (Chan et al 2002;Tinkelman 2010) and substitution between nonprofit organizations or between sectors (Sokolowski 2013;Tinkelman 2010). …”

Private Donations, Government Grants, Commercial Activities, and Fundraising: Cointegration and Causality for NGOs in International Development Cooperation

“…Previous empirical evidence suggests that the positive effects of fundraising on private donations dominate the negative effects due to a higher price of giving (see, e.g., Khanna and Sandler, 2000;Ribar and Wilhelm, 2002). Andreoni and Payne (2011) find a particularly strong effect of one dollar spent on fundraising yielding more than five dollars of donations.…”

“…11 Considerable differences across sectors "remain a puzzle" (Okten and Weisbrod, 2000: 267). The scarce evidence on NGOs in international development cooperation tends to support complementarities between government grants and private donations (Ribar and Wilhelm, 2002;McCleary and Barro, 2008;Nunnenkamp and Öhler, 8 Heutel (2009) finds that crowding-in effects of government grants on private donations are particularly pronounced for younger NGOs. This is consistent with signaling models according to which government grants reveal the quality of NGOs and help overcome information asymmetries.…”

“…Panel cointegration estimators are employed to examine the long-run effects of government grants, commercial revenues, and fundraising expenditures on private donations for 51 1 The few studies on donations to internationally active NGOs include Ribar and Wilhelm (2002), McCleary and Barro (2008), and Nunnenkamp and Öhler (2012b). See Section 2 for details on the relevant literature.…”

Global environmental problems, efficiency and limited altruism

“…Andreoni, 1989;Ribar and Wilhelm, 2002). An alternative and more realistic setting is instead what Andreoni terms impure altruism, where the utility of individuals is not affected by the utility of other individuals per se, but where people get a "warm-glow" from the pure act of giving.…”