ESRC Public Policy Seminar 'Volunteering and Money: An Uneasy Partnership?' University of Kent, September 17, 2015. Canterbury, Kent (UK)

1. Public funding and the voluntary sector
Arjen de Wit
Philanthropic Studies, VU University Amsterdam
ESRC Public Policy Seminar
University of Kent, Canterbury
17 September 2015

2. Theories of altruism
 Behavioural economics
 Utility function includes preference for
provision of public good
 Public good can be provided in different ways

3. Theories of altruism
 Behavioural economics
 Utility function includes preference for
provision of public good
 Public good can be provided in different ways
voluntary work, charitable donations and
government expenditures are substitutes

4. Giving money or giving time?
People who volunteer are…
 Older
 Higher educated
 Higher incomes
 Wealthier
 Frequent churchgoers

5. Giving money or giving time?
People who volunteer are…
 Older
 Higher educated
 Higher incomes
 Wealthier
 Frequent churchgoers
People who give are…
 Older
 Higher educated
 Higher incomes
 Wealthier
 Frequent churchgoers

6. Giving money or giving time?
 Profile of volunteers and charitable donors are
quite similar
 Besides altruism, there are many other
mechanisms like ‘warm glow’ of giving,
values, social pressure, etc. etc.
 So maybe giving and volunteering are
complements

7. Giving money or giving time?
 Profile of volunteers and charitable donors are
quite similar
 Besides altruism, there are many other
mechanisms like ‘warm glow’ of giving,
values, social pressure, etc. etc.
 So maybe giving and volunteering are
complements
and_

8. Giving money or giving time?
 Profile of volunteers and charitable donors are
quite similar
 Besides altruism, there are many other
mechanisms like ‘warm glow’ of giving,
values, social pressure, etc. etc.
 So maybe giving and volunteering are
complements
and
!_

9. “Civic core”
(Reed & Selbee, 2001)

10. Local active citizenship in The
Netherlands

11. Shifting policies

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

13. 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

14. Possible welfare state effects
 Altruism: Donors and volunteers provide
services that are left over
 Organisations: Public funding changes
reputations and strategies of nonprofit
organisations
 Resources: Welfare state arrangements affect
levels of income, wealth, education
 Values: People adopt values of universalism,
solidarity from the institutions surrounding
them

15. What's the evidence?

16. What's the evidence?

17. What's the evidence?

18. What's the evidence?

19. 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
 How about volunteering?

20. A closer look
 Macro: what are the rates of voluntary
contributions across welfare states?
 Meso: How are changes in subsidies related to
changes in voluntary contributions to
organisations?
 Micro: how do people respond to actual policy
changes?

21. A closer look
 Macro: what are the rates of voluntary
contributions across welfare states?
 Meso: How are changes in subsidies related to
changes in voluntary contributions to
organisations?
 Micro: how do people respond to actual policy
changes?

22. Cross-country comparison
 European Social Survey 2002
 Donations to “For each of the voluntary organisations
I will now mention, please use this card to tell me
whether any of these things apply to you now or in
the last 12 months, and, if so, which”
− Donated money
− Voluntary work
 Country-level: IMF/OECD 2001

23. Cross-country comparison

24. Cross-country comparison

25. Cross-country comparison

26. Cross-country comparison

27. Cross-country comparison

28. Cross-country comparison

29. A closer look
 Macro: what are the rates of voluntary
contributions across welfare states?
 Meso: How are changes in subsidies related to
changes in voluntary contributions to
organisations?
 Micro: how do people respond to actual policy
changes?

30. Subsidies and donations over time
 The Giving in the Netherlands Panel
Survey (GINPS)
– n = 1,879
 Central Bureau on Fundraising (CBF)
– 17 organisations
 Newspaper articles through LexisNexis

31. No clear trend

32. Budget cuts on development aid

33. More subsidies to the Salvation Army

34. Budget cuts are covered in the news

35. ...but what about extra funding?

36. No strong association on average
Results from first-difference regression models with fixed-effects for organization and year

37. No strong association on average
Results from first-difference regression models with fixed-effects for organization and year

38. No strong association on average
Results from first-difference regression models with fixed-effects for organization and year

39. No strong association on average
Results from first-difference regression models with fixed-effects for organization and year
*

40. A closer look
 Macro: what are the rates of voluntary
contributions across welfare states?
 Meso: How are changes in subsidies related to
changes in voluntary contributions to
organisations?
 Micro: how do people respond to actual policy
changes?

41. How the Dutch respond to cutbacks
 Giving in the Netherlands Panel Survey 2012
(n=1,448)
 “With your household you donated €100 to health
in the past year. If the government cuts 5% in this
area, how would you react?”

42. How the Dutch respond to cutbacks

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

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

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

46. Why don't we find crowding-out?
 It doesn't exist
 The Netherlands is different from the US
 People don’t know about all government
policies

47. Why don't we find crowding-out?
 It doesn't exist
 The Netherlands is different from the US
 People don’t know about all government
policies
 There are many more reasons to donate

48. Why don't we find crowding-out?
 It doesn't exist
 The Netherlands is different from the US
 People don’t know about all government
policies
 There are many more reasons to donate
 Other mechanisms (organisations, resources,
values) suppress the effect

49. Why don't we find crowding-out?
 It doesn't exist
 The Netherlands is different from the US
 People don’t know about all government
policies
 There are many more reasons to donate
 Other mechanisms (organisations, resources,
values) suppress the effect
 It depends on the organisational context

50. Summing up
 Theories of altruism predict that volunteering
can be substituted by charitable giving or
public funding
 This is not likely to occur
 Same predictors of giving money and giving
time
 People don’t know and don’t care about
government subsidies

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