Charitable giving responses to education budgets

Abstract

Do changes in government spending affect voluntary contributions to those recipients? We examine how changes in K-12 education budgets impact donations to teachers using data from DonorsChoose.org, an online crowdfunding platform for public school teachers to raise money. We find a positive correlation between budgets and voluntary contributions when not accounting for their endogenous relationship. Estimates using instrumental variables show evidence for crowd-out of private giving, though the magnitudes are small relative to spending and do not meaningfully offset budget changes. These results are driven entirely by teachers' posting of requests.