Presentation at NSV/VVS's Annual Sociology Meeting (Dag van de Sociologie), Amsterdam May 27, 2015

1. How do donors and organizations react
on changes in government subsidies?
Arjen de Wit
Philanthropic Studies, VU University Amsterdam
Annual Sociology Meeting 2015 / Dag van de Sociologie 2015
A test of crowding-out in the Dutch voluntary sector

2. Shifting policies

Budget cuts

'Big Society' (UK)

'Do-democracy' (Netherlands)

'Participation society' (Netherlands)

What are the consequences for non-profits?

3. The crowding-out hypothesis
Alexis de Tocqueville
1840
Robert Nisbet
1953
Milton Friedman
1962

4. The crowding-out hypothesis
“For every welfare state, if social obligations become
increasingly public, then its institutional arrangements
crowd out private obligations or make them at least no
longer necessary”
(Van Oorschot and Arts 2005: 2)
Alexis de Tocqueville
1840
Robert Nisbet
1953
Milton Friedman
1962

5. What's the evidence?

6. Valid testing?

Laboratory experiments in which
undergraduate students don't decide over
their own money, are aware of participating in
research and have full information

Aggregate measures of non-profit revenue
sources

7. Why would we expect crowding-out?

Individuals: altruism
– But do they actually know about
(changing) subsidies? (Horne et al. 2005)

Organizations: fundraising strategies
– But how do organizations use extra
revenues?

8. The current data

The Giving in the Netherlands Panel
Survey (GINPS)
– n = 1,879

Central Bureau on Fundraising (CBF)
– 17 organizations

Newspaper articles through LexisNexis

9. No clear trend

10. Budget cuts on development aid

11. More subsidies to the Salvation Army

12. Budget cuts are covered in the news

13. ...but what about extra funding?

14. No evidence for crowding-out
Δ Subsidies .169
(.133)
.117
(.135)
.087
(.136)
Δ newspaper articles on
subsidies
- .050 **
(.024)
- .023
(.028)
Δ newspaper articles on cuts .072
(.051)
.044
(.053)
Δ Fundraising expenditures 1.512 *
(.839)
Linear regression models with fixed effects for organizations and years.
* p < .1; ** p < .05; *** p < .01

15. Media coverage discourages donors
Δ Subsidies .169
(.133)
.117
(.135)
.087
(.136)
Δ newspaper articles on
subsidies
- .050 **
(.024)
- .023
(.028)
Δ newspaper articles on cuts .072
(.051)
.044
(.053)
Δ Fundraising expenditures 1.512 *
(.839)
Linear regression models with fixed effects for organizations and years.
* p < .1; ** p < .05; *** p < .01

16. Fundraising increases donations
Δ Subsidies .169
(.133)
.117
(.135)
.087
(.136)
Δ newspaper articles on
subsidies
- .050 **
(.024)
- .023
(.028)
Δ newspaper articles on cuts .072
(.051)
.044
(.053)
Δ Fundraising expenditures 1.512 *
(.839)
Linear regression models with fixed effects for organizations and years.
* p < .1; ** p < .05; *** p < .01

17. Why don't we find crowding-out?

18. Why don't we find crowding-out?

It doesn't exist

19. Why don't we find crowding-out?

It doesn't exist

The Netherlands is different from the US

20. Why don't we find crowding-out?

It doesn't exist

The Netherlands is different from the US

It depends on the organizational context

21. Why don't we find crowding-out?
“Crisis”

22. Thank you
Arjen de Wit
Philanthropic Studies
VU University Amsterdam
@arjen_dewit
a.de.wit@vu.nl