In a study by the National Bureau of Economic Research (NBER) the authors, James Andreoni of the UCSD Department of Economics and A. Abigail Payne of the McMaster University (Canada) Department of Economics, look at how goverment grants affect organizations fundraising efforts. We have included the NBER Working Papers Series abstract of the study and a link to the complete report.

Using data from charitable organizations in the US, authors have established that government grants to charities largely crowd out giving from other sources, but that this reduction is due mostly to reduced fundraising activities of the charity itself. We use much more detailed data from over 6000 charities in Canada, measured for up to 15 years, to provide valuable new insights into this phenomenon. In particular, dollars received from individuals is largely unchanged by government grants. Instead, the crowding out is attributable to two other sources of donations not differentiated in US data: giving from other charities and charitable foundations, and donations gained from special fundraising activities, like galas or sponsorships. Only the latter-which is about half of the measured crowding out-represents a potential loss of dollars to the charitable sector as a result of government grants.

Downlad the report HERE.