We study how competition among charities affects individuals’ giving behavior. We characterize situations where charities benefitting substitute or complementary causes incentivize donations by offering subsidies in the form of rebates. Our theory predicts that an increase in the rebate rate offered by a given charity relative to a substitute charity will shift donations away from the substitute charity, but this “stealing” effect is not expected when complementary charities are considered. Our model further characterizes the conditions under which total donations increase with rebates.
Demand for Giving to Multiple Charities: An Experimental StudyEmel Filiz-Ozbay and Neslihan Uler ,
3( 17 )
Journal of European Economic Association