A Theoretical Model of the Effects of Public Funding on Saving Decisions by Charitable Nonprofit Service Providers

Why do charitable nonprofit, service‐providing organizations save? What are the tradeoffs between using income to build up cash reserves and serving more clients? Saving may generate income, protect the organization against a drop in donations, and increase the organization's chances of survival. Saving, though, may affect the likelihood that nonprofits receive private and public funding. We model the relationship among private and public income, economic conditions, and nonprofit savings. We find that anticipation of government help during difficult times tends to reduce the amount of saving done by the nonprofit. This effect is strengthened if government officials view unspent donations as indicative of a lack of need. Both these effects provide a strong incentive for nonprofits to spend on current consumption rather than to save for the future, and thus to increase the burden on the public purse.     

Consumption multipliers of different types of public spending: a structural vector error correction analysis for the UK

The aim of this paper is to investigate the relationship between government spending and private consumption in the UK, for which there is scarce previous empirical evidence. We disaggregate public expenditure into three categories and search for the corresponding private consumption multipliers. Our analysis is based on the estimation of a structural vector error correction model with quarterly non-interpolated data for the period 1981:1–2007:4. Initially, we estimate negative but barely significant effects on consumption of shocks to total public spending. Then, using the public spending breaking down, we find that while shocks to public wages crowd-out private consumption as predicted by neoclassical models, shocks to the non-systematic component of social spending and government purchases of goods and services generate a positive reaction, so to crowd-in private consumption. Thus, the qualitative and quantitative dimensions of fiscal multipliers on private consumption change across different public spending categories. Our findings suggest that any empirical support of competing theoretical models on the issue would benefit from a disaggregation of government expenditure, rather than focusing on the aggregate measure.     

The nonprofit sector in international perspective: The case of Sri Lanka

Sri Lanka, a developing country, has a small but growing nonprofit sector that engages in the formation of social overhead and human capital, as well as in more traditional social services. The most active multipurpose organizations combine large foreign monetary donations with domestic donations of volunteer labor. Smaller organizations depend primarily on modest government grants for financial support. Private domestic monetary contributions, unlike in the U. S., play only a minor role. Origins of these nonprofit institutions, motivations of foreign donors and of volunteer labor, interactions with the government, and implications for economic development and social welfare are examined.     

Precautionary savings and the governance of nonprofit organizations

We present a model of nonprofit governance built on two assumptions: (1) organizations wish to hold precautionary savings in order to smooth expenditures; and (2) it is relatively easy for managers to divert these funds for personal use. Hence, donors face a trade off between expenditure smoothing and donation dissipation. We examine the model's predictions using panel data on U.S. nonprofits. We show that organizations in states with poor government oversight have managerial compensation that is more highly correlated with inflows of donations and allocate a smaller percentage of donations to the endowment for future expenditures relative to organizations in strong oversight states.     

外国直接投资对国内投资的影响及区域差异——基于省级面板数据的广义矩法估计

利用我国1985~2005年的经济数据,以各个省市为观测对象建立面板数据模型,并采用广义矩方法对模型进行估计,在此基础上检验外国直接投资对我国国内投资的动态影响及区域差异。研究表明,对全国整体而言,外国直接投资对我国国内投资的影响表现为挤入效应,但在局部地区如东部地区,已经出现了较明显的挤出效应。     

Can tax regulations moderate revenue diversification and reduce financial distress in nonprofit organizations?

As a result of policies to reduce public deficit, nonprofit organizations have been forced to turn to charitable donations in order to diversify their revenue structure and thus reduce their levels of financial distress. Public administrations have supported this process through tax mechanisms designed to provide a legal framework that will encourage private philanthropy. Our aim is to analyse the role of nonprofit tax regulations in moderating the influence of revenue diversification on insolvency risk. To this end, we drew a sample of 406 nonprofit organizations located in Aragon and Navarre, two European regions with different tax regulations, for the period 2008–2018. Our results reveal that some tax regime requirements, such as the organizational purpose, minimum initial endowment, engagement in commercial activity, and accountability and monitoring standards, have a positive impact on revenue diversification and the reduction of financial distress and vulnerability. However, we also detect differences between regions which suggest that tax harmonization for nonprofit organizations remains a challenge.     

Does formal financial development crowd in informal financing? Evidence from Chinese private enterprises

The relationship between formal and informal finance is uncertain. They serve as substitute for high-quality borrowers but are complement for low-quality borrowers. As formal financial institutions expand, they may concentrate on high-quality borrowers or diversify among borrowers of different qualities. Using unique survey data from Chinese private firms, we are allowed to investigate the relationship for a group of borrowers who were considered as low-quality. We find that formal financial development imposes a crowd-in effect for private firms’ informal financing, especially in East China. There is heterogeneity between East and West China. We document that the crowd-in effect is greater for private firms with bank access or of large size.     

政治关联、慈善捐赠与政府补助*--来自中国亏损上市公司的经验证据

文章以2009－2012年中国亏损上市公司作为研究样本,运用社会网络理论,分析和检验了高管的政治关联对亏损企业通过慈善捐赠行为获得政府补助的影响。研究结果表明：第一,有政治关联的亏损企业比无政治关联的亏损企业更容易出于获取政府支持而进行慈善捐赠,高管的政治关联广度相对于其政治关联深度对亏损企业慈善捐赠的正向影响更大,同时高管的地方政治关联相对于其中央政治关联对亏损企业慈善捐赠的正向影响也更大;第二,基于“利益互惠”的原则以及对企业积极履行社会责任的鼓励,政府通常会倾向于对进行慈善捐赠的企业给予更多的补助;第三,相对于无政治关联的亏损企业,有政治关联的亏损企业的慈善捐赠能够帮助其获得更多的政府补助,相对于中央政治关联,地方政治关联对亏损企业通过慈善捐赠获得政府补助的“支持效应”更加明显,同时政治关联广度更宽的亏损企业也通过慈善捐赠获得了更多的政府补助。文章的研究结论深化了对中国亏损上市公司慈善捐赠的动机及其经济后果的认识,为相关部门规范企业慈善行为也提供了有益的启示。     

The geography of giving: The effect of corporate headquarters on local charities

Does the presence of corporate headquarters in a city affect the incomes of local charities? To address this question we combine data on the head office locations of publicly traded U.S. firms with information on the receipts of local charitable organizations. Cities like Houston, San Jose, and San Francisco gained significant numbers of corporate headquarters over the past two decades, while cities like Chicago and Los Angeles lost. Our analysis suggests that attracting or retaining the headquarters of a publicly traded firm yields approximately $3–10 million per year in contributions to local non-profits. Likewise, each $1000 increase in the market value of the firms headquartered in a city yields $0.60–1.60 to local non-profits. Most of the increase in charitable contributions is attributable to an effect on the number of highly-compensated individuals in a city, rather than through direct donations by the corporations themselves. The increased private sector donations from the presence of corporate headquarters do not seem to crowd out government grants to local charities.     

Coordination failure, property rights and non-profit organizations

This paper advances a socio-economic theory of nonprofit organizations aiming at conceiving this organizational form in its complexity and at analysing it from both the viewpoints of its economical and political (democratic) dimensions. This theoretical approach accounts for the existence of nonprofit organizations and the reasons why nonprofit organizations are relatively more efficient when compared with for-profit and government organizations in particular circumstances. The various current explanations of the existence of nonprofit organizations (contract failure, government failure, philanthropic failure) are regrouped around the concept of coordination failure. The paper then examines how nonprofit organizations are able to mitigate these coordination failures. The central thesis is that the specific distribution of property rights characterizing nonprofit organizations results in a particular type of governance structure which allows them to mitigate coordination failures. In turn, the ability of the organization to mitigate coordination failures and therefore its efficiency is conditioned on its democratic functioning.     

Subsidies to the Arts with Multiple Public Donors*

This paper develops a theoretical framework for analyzing public funding for arts markets in which both a national-level arts council and local governments are potential donors. While the arts council is assumed to allocate grants to maximize the expected number of theatres achieving an ‘acceptable’ level of output, the local government is only concerned to maximize its total budget from local tax revenues. Despite this objective, a rationale for local governments to give grants is derived. The total grant allocation to any institution arises as an equilibrium outcome to a game played between the arts council and the relevant local government. Theatre managements take account of this allocation process in making their output decisions. Several empirical propositions are derived.     

Political connection,corporate philanthropy and efficiency: Evidence from China’s anti-corruption campaign

We find that the 2013 Chinese anti-corruption campaign remarkably reduced charitable donations from listed companies with strong political connections, and lessened government subsidies to these companies, implying a reciprocal relationship between companies and the government prior to the campaign. The campaign also improved the productivity of companies with strong connections. The results are consistent with a model in which favor exchanges between firms and the government divert resources away from production in a corrupt environment. These findings highlight a self-serving, and sometimes corrupt, motive of corporate donation, and imply that the campaign is effective in curbing corrupt collusion between companies and government officials. Moreover, they give empirical support to the negative efficiency implications of corruption.     

Demand for collective goods in private nonprofit markets: Can fundraising expenditures help overcome free-rider behavior?

Economic theory ascribes the primary role in the provision of public goods to government. This emphasis on government overlooks the role of the not-for-profit sector in providing collective-type goods. In this paper we seek to determine the factors influencing charitable contributions to private nonprofit organizations by estimating a demand function for the output of these collective-good providers. Specifically, we test the hypothesis that voluntary giving is responsive to conventional market variables such as advertising expenditures, price, and quality. Overall, the results are strongly supportive.     

政府资助、现金持有与企业研发平滑研究

当前,我国政府对企业的研发资助快速增加,而在动态经济环境中,更应关注研发活动均衡健康的长期发展（研发平滑）而非短期增长变动。从政府资助视角对企业研发平滑进行重新审视,运用2007-2012年中国工业上市公司数据,采用系统GMM计量方法,对政府资助、现金持有与企业研发平滑进行了综合探析。结果发现：①我国工业上市公司普遍存在通过现金持有管理来平滑研发支出的现象;②当期政府资助对企业研发有促进作用,而持续的政府资助则会间接影响企业现金持有政策,该调节机制最终会对企业研发活动产生平滑作用。     

Are church and state substitutes? Evidence from the 1996 welfare reform

Churches provide community services similar to those provided by the government, but there has been no convincing analysis of the extent to which church activity can substitute for government activity. To address this important issue, this paper uses a new panel data set of Presbyterian Church (USA) congregations to regress both church-member donations and a church's community spending on a number of variables, including government welfare expenditures. A provision of the 1996 welfare law that decreased the availability and use of welfare services by non-citizens serves as an instrument to identify the causal effect of government spending on church activity. The results show that church activities substitute for government activities. Extrapolating the findings to all denominations, the estimated “crowd-out” effect lies between 20 and 38 cents on the dollar. The results are subjected to a number of robustness tests.     

The shifting boundaries of the mixed economy and the future of the nonprofit sector

The nonprofit sector exists because it can solve better than for-profit firms problems associated with the provision of products with publicness (nonrivalry or nonexcludability) attributes, or those affected by asymmetric information between providers and customers. This advantage is likely to be eroded in the future by various technological advances, particularly in the area of information transmission, analysis, storage and retrieval, and by the increase in the effective size of markets. Consequently, the demand for nonprofit organizations will possibly decline in the future. On the other hand, the operational efficiency of nonprofit organizations is likely to improve due to possibilities of stricter audit of and control over management made possible by enhanced access by nonprofit stakeholders to budgetary and operational information. This will help nonprofit organizations respond better to various failures of for-profit firms and to the insufficiency of government correctives. It is difficult to forecast the net effect of the myriad factors that work in opposite directions on the demand for and supply of nonprofit organizations, although it appears to this author that the economic weight of nonprofit organizations and their distinctive features will wane.     

Proximity Services in Belgium: An Analysis of Public and Nonprofit Relations

In this paper, we analyze the interaction between nonprofit organizations (NPOs) and government with regard to the provision of proximity services. Given the characteristics of these services and the organizational features specific to each sector, we argue that the relationship between the public and the nonprofit sectors is necessary but rather complex. We illustrate our analysis with some empirical evidence collected by the CERISIS-UCL in 1996 for the city of Charleroi (Belgium). This survey shows that NPOs are the major producers of proximity services but are, on average, largely subsidized by government. Public intervention is also significant in the production of these services but is the most striking in their financing. These results evoke the existence of a multifaceted interaction between the public and nonprofit sectors, that we try to understand in this paper. Our analysis highlights that the tension between the current focus of public policies on job creation for the low-skilled unemployed and the service-based mission of most NPOs might generate inappropriate responses to the needs of the community. It also suggests that this conflict of objectives, given the current organization of proximity services, is likely to threaten the autonomy and originality of the nonprofit sector.     

Does corruption hinder investment? Evidence from Russian regions

This paper investigates the relationship between corruption and fixed capital investment in the setting of a corrupt country. Using different measures of corruption – registered cases of bribe taking and incidents of experienced corruption by the population – we find a negative relationship between investment and corruption. We then address the problem of endogeneity of corruption using an instrumental variables approach: when corruption is instrumented with freedom of the press and violations of journalists' rights, we find an even bigger negative effect. Disaggregating investment by ownership-type shows that only private investment is affected by corruption, but not investment made by state-owned companies. The negative effect is larger for companies with full or partial foreign ownership. Additionally, we look at the relationship between corruption and foreign direct investment (FDI): similar to the investment in fixed capital, we find a negative relationship; however, its statistical significance varies across specifications with different data sources for FDI and different corruption measures.     

论政府审计与独立审计关系的厘定

为了明确并充分履行政府审计职责,政府审计机关应当正确处理与独立审计之间四方面的关系:审计业务的委托与被委托关系,政府审计不应当把自己职责范围内的审计业务委托给独立审计组织去做;审计质量的监督与被监督关系,政府审计不应当对独立审计质量进行监督;审计成果的相互利用关系,政府审计应当正确利用独立审计成果;审计职责范围的划分,政府审计不应当与独立审计组织进行联合审计,而应当合理划分各自对国有控股企业的审计职责.     

THE EFFECTIVENESS OF PRIVATE BENEFITS IN FUNDRAISING OF LOCAL CHARITIES*

This article provides an empirical analysis of the role that private benefits play in explaining charitable donations to large cultural and environmental organizations. We develop a multiple discrete choice model with differentiated products. We estimate the model using a unique data set of donor lists for the 10 largest cultural and environmental charitable organizations in the Pittsburgh metropolitan area. We find that some private benefits such as invitations to private dinner parties and special events are effective tools for fundraising. Our policy simulations suggests that the composition of private benefits has a potentially large impact on donor behavior.