how do donors and organizations react on changes in government subsidies? a test of crowding-out in...
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How do donors and organizations react on changes in government subsidies?
Arjen de WitPhilanthropic Studies, VU University Amsterdam
Annual Sociology Meeting 2015 / Dag van de Sociologie 2015
A test of crowding-out in the Dutch voluntary sector
Shifting policies
Budget cuts 'Big Society' (UK) 'Do-democracy' (Netherlands) 'Participation society' (Netherlands) What are the consequences for non-profits?
The crowding-out hypothesis
Alexis de Tocqueville1840
Robert Nisbet1953
Milton Friedman1962
The crowding-out hypothesis
“For every welfare state, if social obligations become increasingly public, then its institutional arrangements crowd out private obligations or make them at least no longer necessary”
(Van Oorschot and Arts 2005: 2)
Alexis de Tocqueville1840
Robert Nisbet1953
Milton Friedman1962
What's the evidence?
Valid testing?
Laboratory experiments in which undergraduate students don't decide over their own money, are aware of participating in research and have full information
Aggregate measures of non-profit revenue sources
Why would we expect crowding-out?
Individuals: altruism
– But do they actually know about (changing) subsidies? (Horne et al. 2005)
Organizations: fundraising strategies
– But how do organizations use extra revenues?
The current data
The Giving in the Netherlands Panel Survey (GINPS)
– n = 1,879 Central Bureau on Fundraising (CBF)
– 17 organizations Newspaper articles through LexisNexis
No clear trend
Budget cuts on development aid
More subsidies to the Salvation Army
Budget cuts are covered in the news
...but what about extra funding?
No evidence for crowding-out
Δ Subsidies .169(.133)
.117(.135)
.087(.136)
Δ newspaper articles on subsidies
- .050 **(.024)
- .023(.028)
Δ newspaper articles on cuts .072(.051)
.044(.053)
Δ Fundraising expenditures 1.512 *(.839)
Linear regression models with fixed effects for organizations and years. * p < .1; ** p < .05; *** p < .01
Media coverage discourages donors
Δ Subsidies .169(.133)
.117(.135)
.087(.136)
Δ newspaper articles on subsidies
- .050 **(.024)
- .023(.028)
Δ newspaper articles on cuts .072(.051)
.044(.053)
Δ Fundraising expenditures 1.512 *(.839)
Linear regression models with fixed effects for organizations and years. * p < .1; ** p < .05; *** p < .01
Fundraising increases donations
Δ Subsidies .169(.133)
.117(.135)
.087(.136)
Δ newspaper articles on subsidies
- .050 **(.024)
- .023(.028)
Δ newspaper articles on cuts .072(.051)
.044(.053)
Δ Fundraising expenditures 1.512 *(.839)
Linear regression models with fixed effects for organizations and years. * p < .1; ** p < .05; *** p < .01
Why don't we find crowding-out?
Why don't we find crowding-out?
It doesn't exist
Why don't we find crowding-out?
It doesn't exist The Netherlands is different from the US
Why don't we find crowding-out?
It doesn't exist The Netherlands is different from the US It depends on the organizational context
Why don't we find crowding-out?
“Crisis”
