Government Incentives and Charitable Donations: Analysis of the Crowding - out Hypothesis in the Czech Republic

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HLADKÁ Marie HYÁNEK Vladimír

Year of publication 2018
Type Article in Proceedings
Conference Proceedings of the 23rd International Conference Theoretical and Practical Aspects of Public Finance 2018
MU Faculty or unit

Faculty of Economics and Administration

Keywords crowding - in; crowding - out; non - profit organisation; non - profit funding; public subsidies
Description Due to their heavy dependence on financial support from the public sector and close links to a wide range of government policies, non-profit organisations are becoming increasingly state-oriented. One significant impact of public subsidies may be identified in case of changing scope of private giving. There are robust evidence on the effects of public funding on nonprofit revenues, however, studies on crowding-out/in present inconsistent results. The results are strongly shaped by the research methods that are used. Although economic experts have striven to empirically test crowding theories, there is no comprehensive research of this type within the Czech Republic. The objective of this paper is to use a regression model to test whether government funding in the Czech Republic encourages or discourages private gifts. Our results demonstrate a crowding-out effect for public resources but not for other types of financing sources, such as revenues from the organization’s own activity and commercial revenues. Answering these questions can contribute to the current knowledge and may have a real impact on both non-profit organisations and government representatives who make decisions about aid.
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