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Is There a Dark Side to Government Supportfor Nonprofits?
Author(s) -
Brooks Arthur C.
Publication year - 2000
Publication title -
public administration review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.721
H-Index - 139
eISSN - 1540-6210
pISSN - 0033-3352
DOI - 10.1111/0033-3352.00081
Subject(s) - government (linguistics) , crowding out , nonprofit sector , perspective (graphical) , state (computer science) , public economics , public policy , public administration , local government , human services , survey data collection , government spending , work (physics) , economics , business , political science , economic growth , market economy , philosophy , linguistics , statistics , mathematics , computer science , welfare , monetary economics , mechanical engineering , engineering , algorithm , artificial intelligence
The relationship between government social spending and private donations to the nonprofit sector is an issue that is relevant to both public administrators and nonprofit managers. Does government funding displace philanthropy, or encourage it? This article introduces the debate into the public administration literature. First, I survey and interpret the empirical work performed to date in this area by economists. Second, I retest this question across four nonprofit subsectors using data on both federal and state/local spending. My survey of the literature shows mixed results, although a broad pattern indicates that “crowding out” tends to dominate, particularly in the areas of social service provision and health. My empirical results are consistent with these findings, although they must be interpreted cautiously from a policy perspective: While results are statistically significant, the degree of crowding out is generally small. On the other hand, the claim that government funding stimulates giving seems to lack both statistical and policy significance.