ESTATE TAXATION AND OTHER DETERMINANTS OF CHARITABLE BEQUESTS

Abstract

This study offers a new empirical contribution to the charitable bequest literature using data on large Connecticut estates from the 1930s and 1940s. We examine the effects of demographic variables, estate size, and the estate tax rate on charitable bequests. Our findings do not confirm the theoretical prediction that higher estate tax rates encourage larger charitable bequests. Our estimates of the wealth elasticity of charitable bequests are consistent with other findings. A surviving spouse and children diminish the size of charitable bequests, but more distant relatives and the age and sex of the decedent do not. A stated religious preference has a strong positive impact on the size of such bequests. Analyses of four separate categories of charitable bequests yield similar results. Bequests to religious organizations are the most wealth inelastic. We also find that the number of charitable categories given bequests is influenced by the same variables which determine total charitable bequests.