Charitable Giving Responses to Education Budgets
Do changes in government spending affect voluntary contributions to those recipients? We examine how changes in K-12 education budgets impact donations to teachers using data from DonorsChoose.org, an online crowdfunding platform for public school teachers to raise money for their classrooms. Using a district-year panel and instruments to address the endogeneity of budgets, we find evidence for crowd-out of private giving, though the magnitudes are fairly small in this setting and do not offset a large proportion of a budget change. These results are driven by entirely teachers' posting of requests, illustrating the importance of considering the demand side of the charitable giving market.
We are grateful for assistance from Barbara Cvenic, Oliver Hurst-Hiller, Andi Muskaj, and Ali Rosen at Donorschoose.org. We received helpful comments from Daniel Hungerman, Benjamin Marx, Jennifer Mayo, and seminar participants at Duke University, the WZB Workshop on Recent Advances in the Economics of Philanthropy, the Cleveland Federal Reserve, Monash University, Southern Economic Association annual meeting, and the Western Economic Association annual meeting. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.