Do changes in government spending affect voluntary contributions to those recipients? This study examines how changes in K-12 education budgets impact donations to teachers using data from DonorsChoose.org, an online crowdfunding platform for public school teachers to raise money for their classrooms.
Using a district-year panel and instruments to address the endogeneity of budgets,the authors find evidence for crowd-out of private giving, though the magnitudes are fairly small in this setting and do not offset a large proportion of a budget change. These results are driven by entirely teachers' posting of requests, illustrating the importance of considering the demand side of the charitable giving market.
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