Financing charitable organizations and non-profit firms

Paper 1. Modeling charitable contributions of time and money . Public goods theory predicts that government spending on charity can perfectly crowd-out charitable contributions. Empirical research has found little support for the perfect crowd-out hypothesis. However, the empirical work only measures part of a contributor's total contribution: gifts of money. Contributors also volunteer labor. This article extends the public goods model to the case in which individuals contribute both time and money to a charity that in turn produces a public good. The model suggests that charitable contributions of time and money are perfectly substitutable in equilibrium. This result offers new interpretations for existing empirical observations, and suggests a new test of the crowd-out hypothesis. The implications of the model are empirically tested using a national survey of charitable activity.;Paper 2. Pumpkin pies and public goods: The raffle fundraising strategy. Raffles are commonly used by charitable organizations, such as schools and churches, to raise money. This article explores the economic incentives inherent in raffle fundraisers. Raffling off a prize is compared to simply asking for voluntary contributions (i.e., a raffle without a prize). Even if every contributor is risk-averse, offering a prize can increase contributions to a public good by more than the value of the prize. Thus, tying charitable contributions to a raffle can increase the equilibrium supply of a public good. Moreover, there exists an optimal raffle prize that maximizes the supply of the public good and the welfare of the community.;Paper 3. Satisfying charitable desire on the job. Can workers satisfy their charitable desires on the job? This article examines the degree to which schoolteachers substitute job characteristics for charitable giving. Using data from the Current Population Survey, I find that public and private schools offer different returns to observable productive characteristics. Furthermore, after controlling for wealth effects, I find that teachers who choose employers that offer lower wages tend to volunteer less. This evidence suggests that lower wage employers offer better non-wage amenities and that at least some of the non-wage amenities are substitutes for charitable giving.