The Altruism Budget: Measuring and Encouraging Charitable Giving

Much of the research on charitable giving has concentrated on how to increase monetary donations to a single organization. But do activities that increase donations to one non-profit or through one method come at the expense of others? This chapter examines the state of the literature on the “altruism budget.” We first discuss whether an act needs to be totally unselfish to be counted in the altruism budget. We then examine the various components that go into the altruism budget, including but not limited to monetary donations, volunteered time, and in-kind gifts. The remainder of the chapter discusses the research on whether the altruism budget is fixed across gifts to different non-profits, in different forms, or at different times. Overall, the evidence is decidedly mixed on whether the altruism budget is fixed or flexible. Perhaps surprisingly, gifts at one point in time do not seem to be neutralized through lower giving later. But the impact on contemporaneous gifts to other charities, or through other forms of giving, is more difficult to summarize. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.