Institutional Art Funding: the Interaction of Governmental and Private Donation

Open Access
Cadmus, Alexander Jay
Area of Honors:
Bachelor of Science
Document Type:
Thesis Supervisors:
  • Stephen Ross Yeaple, Thesis Supervisor
  • Bee Yan Roberts, Honors Advisor
  • James R. Tybout, Faculty Reader
  • institutional arts
  • public finance
  • crowding effects
  • charitable giving
This thesis explores the interaction between private and governmental funding for non-profit arts institutions, with a specific focus on determining whether or not a “crowding effect” occurs. Using data pulled from institutional tax-returns, publicly accessible in a database provided by the Economic Research Institute, a number of regressions were implemented to narrow in on the nature of the relationship between private and public donated revenue streams. Before addressing any original empirical work, this thesis discusses the nature of charitable contributions, and previously established crowding effects. This thesis draws conclusions that when atypically large sums of money are awarded to an institution via a governmental contribution, private funding sees a significant increase in the subsequent period. This implies a sort of delayed crowding-in effect, wherein, given ample time to respond, private funding will respond positively to positive shocks in public funding. This finding is then extended to draw implications for institutional operations, how arts institutions should structure their fundraising efforts.