Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes
Do new societal needs increase charitable giving or simply reallocate a fixed supply of donations? We study this question using IRS datasets and the natural experiment of deadly tornadoes. Among ZIP Codes located more than 20 miles away from a tornado's path, donations by households increase by over $1 million per tornado fatality. We find no negative effects on charities located in these ZIP Codes, with a bootstrapped confidence interval that rejects substitution rates above 16 percent. The results imply that giving to one cause need not come at the expense of another.
You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.
Document Object Identifier (DOI): 10.3386/w27078