Charitable giving and intermediation: a principal agent problem with hidden prices

C-Tier
Journal: Oxford Economic Papers
Year: 2023
Volume: 75
Issue: 4
Pages: 941-961

Authors (3)

Nadine Chlaß (not in RePEc) Lata Gangadharan (Monash University) Kristy Jones (not in RePEc)

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Donations are often made through charitable intermediaries that can fund themselves from these same donations. After intermediation, only a fraction of the amount donated may reach the intended beneficiary. The price of charitable output is therefore higher after intermediation than if donors donated directly toward the end cause. At the same time, this price is hidden from donors since they cannot verify how much intermediaries pass on. We show that while donors reduce their donation in intermediation itself, and also reduce their donation because they expect the price of charitable output to increase, both reactions are either fully or partly compensated by their ethical preferences for the recipient’s rights. Charitable output, therefore, can be a Giffen-good.

Technical Details

RePEc Handle
repec:oup:oxecpp:v:75:y:2023:i:4:p:941-961.
Journal Field
General
Author Count
3
Added to Database
2026-01-25