The ?crowding-out? effect of governmental transfers on private charitable contributions

Abstract

The above analysis provides support for the proposition that governmental social-welfare transfers have actually served to attenuate private charitable giving. Our finding of less-than-total crowding out tends to reject both the ultrarational and BGR hypotheses for society as a whole. However, our results do not preclude the possibility that some contributors have been completely crowded out nor that some contributors have been unaffected by increases in governmental transfers. The highly aggregative data used in this study may conceal substantially different crowding-out effects for particular types of charitable contributions. Further investigation using microeconomic or less aggregative data should help to identify the categories of private charitable contributions most affected by the growth of governmental transfers.