A Forecast of Private Philanthropy Conditional to Changes in Federal Grant Funding

Abstract

            The purpose of this paper is to identify the statistical relationship between aggregate charitable giving and federal grant funding, in order to create a reliable model for forecasting private philanthropy in this decade. The health, education, environment and human services sectors of the economy are analyzed individually to gain deeper insights into their heterogeneous mechanics. This topic is of interest to economists because private contributions to public goods are theoretically crowded out by government spending, so it would be helpful to know if this relationship holds empirically. The models used for forecasting may hint as to the true direction of the relationship between federal grants and private contributions. With current changes in federal grant funding, it is important to know if private philanthropy will change as well.

Notes: All variables are in billions of constant FY 2009 dollars. The data used to generate the figures are collected from the White House Office of Management and Budget available at https://www.whitehouse.gov/omb and the Statistical Abstract of the United States provided by the United States Census Bureau available at http://www.census.gov/compendia/statab.

Dataset    Stata .do file