Summary by Adam Rakestraw
Arjen de Wit is a researcher, data manager and Ph.D Candidate at the Center for Philanthropic Studies at Vrije Universitieit in Amsterdam. His PhD project focuses on quantitative research in answering, “How and when does government support affect charitable giving?” In researching the role of government subsidies in donating money he currently has 2 published articles, one under research and one draft. The following is a summary into the methodology and research used by Arjen leading to the explanation of the Crowding-Out Effect of donor behavior, concluded by a summary of a Q&A session during our interview.
Research and Methodology in Donor Behavior.
The most important aspect into our interview with Arjen was understanding his process to research and how we can apply said processes to our personal research. His latest work in understanding donor behavior, Arjen compares data sets from countries, Netherlands and the US, while considering cultural relevance, world health survey, social and economical backgrounds. He found that the highest incomes give less compared to to middle class in the US and the highest earns give the most in The Netherlands.
Crowding-Out Effect and Research
The “Crowding-Out Effect” hypothesis considers private donations are lower in situations of hight government support. This in turn has led to Westernization movement of economizing less government funding for private and nonprofit sectors. It considers Altruism in funding and not reputation or values. As well, purely Altruistic donor behavior does not care about choice where donors will stop giving if government does. The findings showed that of each $1 of government support crowds out $.64 of private donations. A dollar increase in government support in non experimental data surveys, financial information forms, or other archival data is associated with a slight increase in voluntary contributions on average.
Results challenge the argument of indirect crowding-out, which means that the fundraising behavior of organizations partly explain why people change their donations after government investments or budget cuts. Subsidizing the nonprofit sector could strongly improve the chances of public-private partnerships 1. on the local levels with domestic social welfare issues, 2. initiatives around “care” like transportation, 3. local and private partnerships. However there is little evidence that practiced private donors retreat if governments backdown. On a data survey, 92% said, “no” if budget is changed from governments would you (private sector give more)?
The following characteristics effecting estimates of crowd-out effect funding:
1. Empirical studies that use financial archival data
a. uses aggregated measures of private nonprofit revenue
-donations from individuals, companies, foundations, and other
2. Specify in government support
a. using funding from grants, purchases, subsidies, and vouchers
3. Differences across organizations.
a. small amount of research done
b. cannot distinguish between different parks of the nonprofit sector
Due to data limitations or research design choices, not all of these conditions have been systematically test.
The meta analysis relied on a sample of previous studies on the crowding-out effect.
Meta analysis as defined by Glass (1976): The statistical analysis of a large collection of analysis results from individual studies for the purpose of integrating the findings.
The following Q&A is a summary from the Arjen de Wit interview
- We read your article, but we were wondering in your own voice, Could you please elaborate on your research methodology in measuring crowding-out funding? naming in research design and the data limitations you faced. Plus your overall conclusion in the research
-Asked people if they gave to specific organizations, were named in the media
-Looked at Red Cross, Salvation Army, Oxfam.’
-Question on government subsides be related to private donations
-Domestic Values and Cultural relevance
-Policy makers doesn’t look into it
- WE saw you were an artist, namely a writer, did this background influence your decision in choice of research?
-Not directly, however the structure of research writing in academia sometimes influences order and the structure of preplanning my creative writing.
- Question in sample population? Western nations as a whole, “people from different countries differ their stance towards society problems….” I was wondering if you could give examples in your research were you saw that?
-The research led to examination of the Westernization movement of economizing less government funding for private and nonprofit sectors.
4. Why personally do you think Western countries are economizing their funding or pushing it more onto private and non profit sectors?
-welfare state grown after world war II
-economy welfare went ignore
-Political right started to reframe the economy
-No debate about consequences of capitalism
-“Doing the right thing”
-Shift to a values you based economy
-No fundamental debate
6.Could you give advice to graduate students with little experience in research design, what advice would you give?
-Look cross discipline
-Take in outside sources
-Look into different search terms on google scholar
-Try different methodologies
- quantitative and qualitative
- Don’t just stick to one comfortable perspective and Start with the problem in the field
- Very Direct theme and questions – less board topics
- -Don’t get discourage in gap in literature