New Evidence on Charitable Gift Restrictions

30 Pages Posted: 27 Jun 2012 Last revised: 8 Dec 2016

See all articles by Jeremy P. Thornton

Jeremy P. Thornton

Samford University - Brock School of Business

Sara Helms McCarty

Samford University

Brian Scott

Washington College - Department of Economics

Date Written: June 26, 2012

Abstract

Gift restrictions are a common tool used by donors to ensure charitable intent. Due to increased monitoring costs and the loss of flexibility, gift restrictions are costly to the recipient nonprofit. Using an economic experiment, we study the impact of offering donors the option to restrict their charitable gift. Our primary finding demonstrates that allowing the option to restrict a charitable gift increases the average gift size, whether or not the donor chooses to exercise that option. This result implies that restricted gifts are both an important tool for increasing donations and may be less costly to the nonprofit than originally thought. We further demonstrate that high levels of religious attendance are associated with an increased use of gift restrictions and an increased responsiveness to those restrictions.

Keywords: Charitable giving, gift restrictions, experiment, donor behavior

JEL Classification: C91, D64

Suggested Citation

Thornton, Jeremy P. and McCarty, Sara Helms and Scott, Brian, New Evidence on Charitable Gift Restrictions (June 26, 2012). Applied Economics Letters, Vol. 20, No. 17, 2013, Available at SSRN: https://ssrn.com/abstract=2093479 or http://dx.doi.org/10.2139/ssrn.2093479

Jeremy P. Thornton (Contact Author)

Samford University - Brock School of Business ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States
2057262128 (Phone)

HOME PAGE: http://https://www.samford.edu/business/directory/Thornton-Jeremy

Sara Helms McCarty

Samford University ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States

Brian Scott

Washington College - Department of Economics ( email )

300 Washington Ave.
Chestertown, MD 21620
United States

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