EFFECTS OF GOVERNMENT SUPPORT TO NPIs ON PRIVATE

PHILANTHROPY

Santiago, July 24, 2015

Presented by S. Wojciech SokolowskiJHU Center for Civil Society Studies

SOURCES OF NPI SUPPORT41-COUNTRY AVERAGE

Private fees and sales;

50%Government

payments; 35%

Private phi-lanthropy;

14%

Source: JHU CCSS

2-PARTY TRANSACTIONS:NPI - BENEFICIARY

3-PARTY TRANSACTIONS:PAYER – NPI – BENEFICIARY

RESEARCH QUESTION

Is the behavior of 3rd parties supporting NPIs interconnected?

How does government support to NPIs affect private philanthropy?

POSSIBLE ANSWERSGOVERNMENT SUPPORT:

CROWDS OUT

CROWDS IN

HAS NO EFFECT ON

PRIVATE PHILANTHROPY

LEVEL OF ANALYSISMICRO (organization-level):

CROWDING OUT (Zero-sum game)

MACRO (sector-level):

CROWDING IN

CROWDING OUT

NO EFFECT

MACRO-LEVEL MODEL OF PHILANTHROPIC SUPPORT TO NPIs

Aggregate philanthropic

giving to NPIs

CV1 General socio-econ.

factors

TV Government payments to

NPIsCV2 NPI market income

Personal incomeSocial value of philanthropySocial need for philanthropy

FOUR BEHAVIORAL MODELS AND THEIR MACRO-LEVEL PREDICTIONS

ACTION ORIENTATION PURPOSE-RATIONAL VALUE-RATIONAL

TRANSACTIO

N COS

T

LOW1. Efficiency maximization

Crowding out or “philanthropic flight”

3. Solidarity expressionCrowding in

HIGH 2. Cost/loss avoidanceCrowding in

4. Strategic positioningNo effect due to cancelling out

JHU COMPARATIVE NPI DATA

Kenya

Israel

Pakistan

Australia

Belgium

ItalySlovakia

Germany

United Kingdom

Denmark

France

Sweden

Norway

The Netherlands

Finland

Austria

Switzerland Czech Republic

Poland

Romania

Russia

HungaryUnited States

Mexico

Colombia

Brazil

Chile

Canada

UgandaArgentina

South Africa

Peru

Tanzania

Ghana Lebanon India

ThailandNew Zealand

Morocco

Portugal

Spain

Ireland

Egypt

Japan

Korea

The Philippines

Turkey

GOVERNMENT AND PHILANTHROPIC SUPPORT TO NPIs 41 Countries

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

f(x) = 0.111465038168394 x + 0.00325300353176131R² = 0.293250243510477

Government as % of GDP

Phila

nthr

opy

as %

of G

DP

Effects of Government Payments on PhilanthropyEntire NPI sector

Standardized regression coefficientsVariable Model 1 Model 2 Model 3

Per capita GDP .27 .23 -.01

Gini coefficient .34 .28 .27

Market income of NPIs .33 .19

Gov’t payments to NPIs .52

Adjusted R2 8.6% 15.1% 31.5%

Model 1: CV1 General socio-economic factorsModel 2: CV1 and CV2 General socio-econ factors and market income Model 3: Full model with TV government payments to NPIs DV: Philanthropic giving to NPI sector as percent of GDP

Hypothesis supported: Crowding – in

Effects of Government Payments on PhilanthropyService vs Expressive Activities

Variable Model 1 Model 2 Model 3

Per capita GDP .49 .26 .06

Gini coefficient .35 .28 .25

Market income of expressive NPIs .40 .35

Gov’t payments to service NPIs .39

Adjusted R2 11.7% 22.4% 37.3%

Model 1: CV1 General socio-economic factorsModel 2: CV1 and CV2 General socio-econ factors and market income Model 3: Full model with TV government payments to NPIs DV: Philanthropic giving to NPIs in expressive activities as percent of GDP

Hypothesis supported: Philanthropic flight

Standardized regression coefficients

CONCLUSION 1Government support to NPIs encourages private giving to NPIs

Reasons:

Transaction cost reduction

Expression of humanitarian values

CONCLUSION 2Government support to service NPIs boosts private giving to expressive NPIs

Reasons:

Efficiency maximization

Fulfillment of needs

FULFILLMENT OF NEEDS IN SOCIAL DEMOCRACY

Government

Philanthropy

THANK YOU

Center for Civil Society StudiesThe Johns Hopkins University

Download the paper from:

http://ccss.jhu.edu/publications-findings/?did=391