TY - JOUR AU - Andreoni,James AU - Payne,Abigail AU - Smith,Justin D. AU - Karp,David TI - Diversity and Donations: The Effect of Religious and Ethnic Diversity on Charitable Giving JF - National Bureau of Economic Research Working Paper Series VL - No. 17618 PY - 2011 Y2 - November 2011 UR - http://www.nber.org/papers/w17618 L1 - http://www.nber.org/papers/w17618.pdf N1 - Author contact info: James Andreoni Department of Economics University of California, San Diego 9500 Gilman Drive La Jolla, CA 92093-0508 Tel: 858/534-3832 Fax: 858/534-7040 E-Mail: andreoni@ucsd.edu A. Abigail Payne Department of Economics McMaster University KTH 426, 1280 Main Street West Hamilton, Ontario, Canada L8S 4M4 Tel: 905/5259140 ext 23814 Fax: 905/521-8232 E-Mail: paynea@mcmaster.ca Justin D. Smith Department of Economics Wilfrid Laurier University P3090, 75 University Ave. W. Waterloo, Ontario, Canada N2L 3C5 E-Mail: jusmith@wlu.ca David Karp McMaster University E-Mail: david@davidkarp.ca M2 - featured in NBER digest on 2012-03-01 AB - We explore the effects of local ethnic and religious diversity on individual donations to private charities. Using 10-year neighborhood-level panels derived from personal tax records in Canada, we find that diversity has a detrimental effect on charitable donations. A 10 percentage point increase in ethnic diversity reduces donations by 14%, and a 10 percentage point increase in religious diversity reduces donations by 10%. The ethnic diversity effect is driven by a within-group disposition among non-minorities, and is most evident in high income, but low education areas. The religious diversity effect is driven by a within-group disposition among Catholics, and is concentrated in high income and high education areas. Despite these large effects on amount donated, we find no evidence that increasing diversity affects the fraction of households that donate. Over the period studied, ethnic diversity rises by 6 percentage points and religious diversity rises by 4 percentage points; our results suggest that charities receive about 12% less in total donations. As areas like North America continue to grow more diverse over time, our results imply that these demographic changes may have significant implications for the charitable sector. ER -