Money donations,volunteering and organizational efficiency

The purpose of this article is to explain the cross-sectional variation in money donations to charities at the organizational level. Using a unique data base which includes volunteer labor data, this article tests the hypotheses that money donations are positively related to volunteering and the technical efficiency of the firm. Technical efficiency is measured by a number of non-parametric indices. The empirical results indicateinter alia that the more technically efficient the charity, the more money donations it is able to raise. Moreoer, at least for one model, money donations and volunteering are found to be complementary at the organizational level. In addition, the results in this article are not consistent with the well-known hypothesis that government financing crowds out private donations.