Partners in giving: the crowding-in effects of UK government grants

摘要

This study examines the determinants of voluntary donations to UK charities, using empirical specifications that combine error-component and simultaneous-equations methods. In a series of tests, we identify the one-way fixed-effects endogenous representation for government grants as the best empirical model. When this endogeneity is taken into account, government grants cause significant crowding-in for the full sample and the two largest cohorts. Price coefficients are negative, and fund-raising coefficients are positive. Religion charities are net revenue maximizers, whereas other charity cohorts fund raise short of net revenue maximization.