Green Giving: An Analysis of Contributions to Major U.S. Environmental Groups

Data are compiled from the tax records of 29 major environmental organizations for the period 1980-1994 to identify factors that influence voluntary contributions. I examine the effects of organizational characteristics, such as fundraising expenditures and alternative sources of revenue, along with the impact of general economic conditions and the political climate. I find that government grants to the organizations had a positive and statistically significant impact on voluntary contributions rather than a crowding out effect. Contributions were price inelastic, where the price is defined as the effective cost to the donor of achieving a one-dollar increase in the provision of program services. Resources devoted to fundraising had a strong and positive impact on donations, suggesting that the environmental organizations fell short of maximizing both total and net revenues. Contributions were also affected by factors largely outside of the organizations' control. Increases in the unemployment rate were associated with reductions in giving, while donations are shown to be greater in years when a Republican President was in office.