Charity and public libraries: Does government funding crowd out donations?

Abstract

This paper analyzes the determinants of donations to public libraries testing the following hypothesis: Is there a crowd out effect from government funding of public libraries? I look at novel data, the Public Library Survey, and use an unbalanced panel of public libraries across the USA from 2000 to 2013. The results suggest a crowd in effect with an inverted U shape in all levels of government. Local government is associated with 4–6 cents increase in donations, state government with 20–23 cents increase, and federal government with 75 cents to 1 dollar and 33 cents.