1. SPI Conference 2017, September 7, 2017
Can Charitable Donations Compensate For a Reduction in Government Funding? The Role of Information
Arjen de Wit & René Bekkers
Philanthropic Studies, VU Amsterdam
SPI Conference 2017, September 7, 2017 1

2. Short answer

3. Yes.
Charitable donations can compensate for reductions in government funding, but only when potential donors know about changes in government funding.

4. And they rarely do.

5. What participants in economic experiments do: -.64
Journal of Public Administration Research and Theory, 2017, 301–319
doi: /jopart/muw044,
pure altruism
What donors to actual nonprofit organizations do: +.06

6. It may be...
That people outside the lab simply do not know how much government funding an organization receives, and whether this increased or decreased;
Or that they simply do not change their donations even if they know how subsidies changed.
Horne et al. 2005; Jones, 2015

7. What if people actually know about cuts in government funding?
We take advantage of a real change in government funding to a popular charity.
We tell half of the participants in the Giving in the Netherlands Panel Survey about the cut and withhold that information to the other half.
We observe beliefs about changes in government funding and actual giving to that charity.

8. The data
Giving in the Netherlands Panel Survey 2014, broad population sample (n = 1,217) and High Net Worth (HNW) sample (n = 1,187).
Respondents in the random sample are from a pool of people who registered for participating in surveys; the HNW sample is invited through postal mail.
n = 2,458; response rates: 80% / 12% (HNW)
You can get these data at

9. Donation decision
After filling out the survey, respondents receive a reward in the form of points.
The number of points depends on the time it took them to complete the questionnaire.
Average earnings were worth € 3,23.
Points can be exchanged for vouchers, Air Miles or donations to one out of four preselected charitable organizations, including the one we study here. 9

10. Charity: KWF Kankerbestrijding
Dutch Cancer Society, funds cancer research and helps cancer patients.
One of the most popular fundraising organizations in the Netherlands: 65% gives 10

11. Treatment Base line appeal: + Information on lost subsidies:
'The Dutch charities are in need of your support.‘
+ Information on lost subsidies:
'The Dutch charities are in need of your support. KWF Kankerbestrijding for example received € 361,000 on government subsidies in 2011 but received no subsidies in 2012.' 11

12. Manipulation check: beliefs
Perceived subsidy change:
'What do you think, did KWF Kankerbestrijding receive more, an equal amount of, or less government funding in compared with 2011?‘ 12

13. Beliefs changed
Proportion of respondents thinking

14. Giving to KWF as well
Proportion of respondents giving

15. Because of new donors and substitution
Proportion of respondents giving

16. Slight drop in amounts donated
Conditional amounts donated

17. We also asked this scenario question
After the participants made their choices, we asked them the following hypothetical question:
'Imagine that you would have heard that KWF Kankerbestrijding received [more/an equal amount of/less] government funding in 2012 compared with 2011, what would you have done with your reward?‘ 17

18. We also asked this scenario question
After the participants made their choices, we asked them the following hypothetical question:
'Imagine that you would have heard that KWF Kankerbestrijding received [more/an equal amount of/less] government funding in 2012 compared with 2011, what would you have done with your reward?‘
Allocation of these conditions was random in the control group.
The treatment group received a scenario in which government funding either increased or did not change. 18

19. In scenarios effects are similar, perhaps even somewhat smaller
Proportion of respondents giving

20. Most people do not change their giving with different information
Stopped donating
Did not change decision
Started donating
Control group first, then in scenario: “Imagine that subsidies decreased”
96.9
3.1
Information first, then in scenario: “Imagine that subsidies increased / did not change”
1.8
97.2
1.0 20

21. Did not change decision
...but 3% does!
Stopped donating
Did not change decision
Started donating
Control group first, then in scenario: “Imagine that subsidies decreased”
96.9
3.1
Information first, then in scenario: “Imagine that subsidies increased / did not change”
1.8
97.2
1.0 21

22. Long answer Providing information about actual budget cuts
1. increases the number of donors;
2. a majority of whom would otherwise have given to other organizations,
3. but also some who otherwise would not have donated;
4. collectively, the increase in giving is less than the loss in government funding.

23. The role of information
KWF Kankerbestrijding did not actively inform the public about the change in government funding.
If they had done this, we estimate that donors would have increased their giving to cover 78% of the reduction.
Among those who were convinced by the information we provided, the crowd-out was even stronger, 23

25. De Wit & Bekkers, 2017

26. Conclusions
People who are aware of cuts in government funding are more likely to donate
Providing information about funding cuts increased the proportion of donors from 9% to 11%, that is a relative increase of 22%
Awareness of need is important in explaining people's reactions to government policies 26

27. Conclusions
People who are aware of cuts in government funding are more likely to donate
Providing information about funding cuts increased the proportion of donors from 9% to 11%, that is a relative increase of 22%
Awareness of need is important in explaining people's reactions to government policies 27

28. Conclusions
We find crowding-out among citizens who are very wealthy, who do not regularly donate to the organization under study, who have a relatively low level of empathic concern and who have a relatively high principle of care.
The effect is similar in real money and hypothetical conditions. 28

29. Thank you. Arjen de Wit @arjen_dewit a.de.wit@vu.nl René Bekkers
@renebekkers
This paper, the data, as well as the code for the analyses are available on the Open Science Framework, 29

30. Additional findings
We find crowding-out is stronger among citizens who have a relatively low level of empathic concern and who are donors. 30

31. Moderators of the information effect31