This thesis explores three topics in the study of charities and charitable giving. The first chapter studies a classic question in public economics which deals with how charities react to government grants. In recent years this question of understanding crowd-out from the charity's perspective has been extended by numerous authors. This chapter is an extension of this work by using the framework from Andreoni, Payne, and Smith (2014) which studied the impact of a specific granting program in the UK. We use a grant program for charities from a Canadian provincial government agency to explore the extent to which these grants crowd out revenue from other sources. We are able to explore more than 15,000 applications by charities for funding over a 10-year period and have constructed a rich data set that captures information about the application and the revenues and expenses of the charity. We demonstrate that the overall revenues of the charity increases approximately 20% and that the effect of the grant extends several years. We also find that the grant raises revenue nearly dollar-for-dollar for small charities and by more than dollar-for-dollar for medium and large charities.
The second chapter further explores how charities operate by studying how managers of charities influence the charity's finances. Using a novel dataset of Canadian charities that links the manager of a charity to the charity's financial data I employ a multi-leveled fixed effects model to estimate the effect the manager of a charity has on the charity's financial outcomes. I find that a one standard deviation increase in manager quality leads to a 0.516 standard deviation increase in total revenue, which amounts to over $500,000, with similar magnitudes for other measures of revenue and expenditures. I then use characteristics of the manager such as gender and marital status to find which characteristics are more prevalent in managers with higher estimated ability. Finally, I present evidence of positive match effects between managers and charities suggesting that good managers are assigned to good charities, and that the effect of a manager can persist even after the manager leaves the charity.
Finally in the third chapter we explore the extent to which donation decisions are influenced by government policies. Specifically we study the extent to which the salience of a tax-induced incentive for charitable giving influences donors behaviour. Previous academic work has focused on estimating the price elasticity of giving and differences between permanent and transitory effects of changes in the price. This paper focuses on the timing and salience of tax incentives for giving. The Quebec provincial government responded to the January 12, 2010 Haiti Earthquake by permitting donations for the relief effort to be reported on the 2009 tax return. Residents in the rest of Canada reported their donations for Haiti relief efforts on their 2010 tax return. This difference in policy as well as the widespread announcement of the Quebec policy provides a natural experiment for testing whether the timing associated with reporting donations on one's tax return and the salience of the announcement of the policy affects charitable giving. In Canada, all tax filers with a tax liability can benefit from the reporting of donations and the credit available for such donations is tied to the level of the reported donations. We find that Quebec taxpayers gave more than taxpayers in the rest of Canada during this period and that this effect is driven by both an extensive (increased givers) and intensive (increased giving) margin. This result has important policy implications and contributes to current debates on the use of tax incentives to encourage charitable giving. / Thesis / Doctor of Philosophy (PhD)
| Identifer | oai:union.ndltd.org:mcmaster.ca/oai:macsphere.mcmaster.ca:11375/20879 |
| Date | January 2017 |
| Creators | Minaker, Bradley |
| Contributors | Payne, A. Abigail, Economics |
| Source Sets | McMaster University |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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