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Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes / Tatyana Deryugina, Benjamin M. Marx.

By: Contributor(s): Material type: TextTextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w27078.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s): Online resources: Available additional physical forms:
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Abstract: Do new societal needs increase charitable giving or simply reallocate a fixed supply of donations? We study this question using IRS datasets and the natural experiment of deadly tornadoes. Among ZIP Codes located more than 20 miles away from a tornado's path, donations by households increase by over $1 million per tornado fatality. We find no negative effects on charities located in these ZIP Codes, with a bootstrapped confidence interval that rejects substitution rates above 16 percent. The results imply that giving to one cause need not come at the expense of another.
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May 2020.

Do new societal needs increase charitable giving or simply reallocate a fixed supply of donations? We study this question using IRS datasets and the natural experiment of deadly tornadoes. Among ZIP Codes located more than 20 miles away from a tornado's path, donations by households increase by over $1 million per tornado fatality. We find no negative effects on charities located in these ZIP Codes, with a bootstrapped confidence interval that rejects substitution rates above 16 percent. The results imply that giving to one cause need not come at the expense of another.

Hardcopy version available to institutional subscribers

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