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Individual decision making and organizational positioning
- 1. Individual Decision Making and Organizational Positioning A Test of Crowding-Out in the Dutch Voluntary Sector Arjen de Wit 43rd ARNOVA Annual Conference November 21, 2014, Denver, CO
- 2. ShiBing policies • Budget cuts • ‘Big Society’ (UK) • ‘Do-‐democracy’ (Netherlands) • ‘ParPcipaPon society’ (Netherlands) • What are the consequences for nonprofits?
- 3. The crowding-‐out hypothesis • If government increase subsidies with $1, private donaPons decrease with $1
- 4. The crowding-‐out hypothesis • If government increase subsidies with $1, private donaPons decrease with $1 • Like a waterbed
- 5. What’s the evidence? De Wit, A. & Bekkers, R. ‘ Government Support and Charitable DonaPons: A Meta-‐Analysis of the Crowding-‐Out Hypothesis’. Submi`ed to Public Administra0on Review.
- 6. Valid tesPng? • Laboratory experiments in which undergraduate students don’t decide over their own money, are aware of parPcipaPng in research and have full informaPon • Aggregate measures of nonprofit revenue sources
- 7. Why would we expect crowding-‐out?
- 8. Why would we expect crowding-‐out? • Individuals change their giving decision • Organiza0ons posiPon themselves differently in the nonprofit market
- 9. Individual behavior • DonaPng has public and private benefits • Public benefits can equally well be produced by others, i.e. the state • But… • Do people know about subsidies? (Horne et al. 2005) • Are they capable of changing their giving? • And do they value the public benefits? (Andreoni 1989, 1990)
- 10. Individual behavior • DonaPng has public and private benefits • Public benefits can equally well be produced by others, i.e. the state • But… • Do people know about subsidies? (Horne et al. 2005) • Are they capable of changing their giving? • And do they value the public benefits? (Andreoni 1989, 1990)
- 11. Individual behavior • DonaPng has public and private benefits • Public benefits can equally well be produced by others, i.e. the state • But… • Do people know about subsidies? (Horne et al. 2005) • Are they capable of changing their giving? • And to what extent do they value public benefits vs. private benefits?
- 12. OrganizaPonal posiPoning • Nonprofit organizaPons have lower need to look for alternaPve sources of income when government subsidies increase • ‘Fundraising crowding-‐out’ (Andreoni & Payne 2003, 2011)
- 13. OrganizaPonal posiPoning • Nonprofit organizaPons have lower need to look for alternaPve sources of income when government subsidies increase • ‘Fundraising crowding-‐out’ (Andreoni & Payne 2003, 2011) • But…
- 14. OrganizaPonal posiPoning • Nonprofit organizaPons have lower need to look for alternaPve sources of income when government subsidies increase • ‘Fundraising crowding-‐out’ (Andreoni & Payne 2003, 2011) • But… • How do organizaPons use extra revenues? • Is fundraising equally effecPve across persons?
- 15. The current data • Giving in the Netherlands Panel Study (GINPS) – Change in donaPons between two years – N = 1,879 • Central Bureau on Fundraising (CBF) – Change in government subsidies between two years (lagged) – 17 organizaPons
- 16. Results Linear regression on Δ Dona'ons Δ Subsidies Media coverage * Δ Subsidies Higher educated * Δ Subsidies Paid job * Δ Subsidies Own home * Δ Subsidies Private benefit * Δ Subsidies (Constant)
- 17. Increases in subsidies are followed by increases in donaPons… Linear regression on Δ Dona'ons Δ Subsidies 0.831 ** Media coverage * Δ Subsidies Higher educated * Δ Subsidies Paid job * Δ Subsidies Own home * Δ Subsidies Private benefit * Δ Subsidies (Constant) -‐ 0.110
- 18. …irrespecPve of whether they are reported in newspapers… Linear regression on Δ Dona'ons Δ Subsidies 0.831 ** -‐ 0.128 Media coverage * Δ Subsidies 0.964 Higher educated * Δ Subsidies Paid job * Δ Subsidies Own home * Δ Subsidies Private benefit * Δ Subsidies (Constant) -‐ 0.110 -‐ 0.915
- 19. …and more strongly among the higher educated. Linear regression on Δ Dona'ons Δ Subsidies 0.831 ** -‐ 0.128 1.155 (*) Media coverage * Δ Subsidies 0.964 Higher educated * Δ Subsidies 0.748 * Paid job * Δ Subsidies 0.019 Own home * Δ Subsidies -‐ 0.203 Private benefit * Δ Subsidies -‐ 0.136 (Constant) -‐ 0.110 -‐ 0.915 -‐ 4.262 **
- 20. Increases in subsidies are followed by increases in fundraising spending… Linear regression on Δ Fundraising Δ Subsidies 0.022 ** (Constant) 0.116 **
- 21. …but this cannot explain the relaPon between subsidies and donaPons. Linear regression on Δ Dona'ons Δ Subsidies 0.831 ** 0.771 ** 0.774 ** Δ Fundraising spending 2.783 ** 4.401 * Asked * Δ Fundraising spending -‐ 2.270 (Constant) -‐ 0.110 -‐ 0.434 -‐ 1.462 (*)
- 22. Why don’t we find crowding-‐out?
- 23. Why don’t we find crowding-‐out? • The sample is not representaPve
- 24. Why don’t we find crowding-‐out? • The sample is not representaPve • The Netherlands is different from the US
- 25. Why don’t we find crowding-‐out? • The sample is not representaPve • The Netherlands is different from the US • It doesn’t exist
- 27. Thank you Arjen de Wit Center for Philanthropic Studies VU University Amsterdam a.de.wit@vu.nl www.giving.nl