Effects of Subsidies on Symphony Orchestra Repertoire

Symphony orchestras have the classic cost structure leading to market failure and the nonprofit organizational form. As a nonprofit, revenue sources include ticket sales, donations, government support, and other endeavors, leaving the determination of organizational goals uncertain. Quality programming, often part of the symphony mission statement, is associate

Crowding –Out and Fundraising Efforts: The impact of government grants on Symphony Orchestras

The crowding-out of private donations by government grants is an integral element in designing an efficient method of financing nonprofit activity. This paper looks at elements of crowd-out, both the direct impact on donors and the indirect impact due to the response of nonprofits. We include both a theoretical and empirical analysis of the reactions by donors and nonprofits to an increase in government funding based on data from the League of American Orchestras’ annual reports from 2004-2007. To combat indirect crowd-out, renewed emphasis should be placed on grant design; for direct crowd-out, theories of collective action are appropriate

Demand functions for museum services

Museums Worldwide are facing financial exigencies and are being forced to rely on earned income, including admission fees, to finance their activities. Using data from the 1989 Museum Surveywe estimate demand functions for seven types of museums in the United States. Previous empirial evidence on the effects of admission fees on museum attendance have either been anecdotal or case study in nature. This study presents the first general empirical evidence on factors influencing the demand for museum services. Our results provide evidence that the demand for museum services is price inelastic and that museum quality has important effects on museum demand. We also argue that out results indicate that the adverse effects of admission charges on attendance are small and relatively easy to alleviate.

Income sources and declared charitable tax deductions

Within the framework of traditional economic theory a charitable contribution is considered a consumption good. As such, the demand for giving is affected by changes in the price of giving and current income. Moreover, changes in wealth, expected future income, and 'habits' may affect giving. Previous empirical studies of giving have not considered the possibility of the impact that donor's wealth might have on giving. One way of accounting for such possible effect is to include various sources of donor's income in the demand function. Using the Internal Revenue Service Individual Tax Model Files and a dynamic econometric model of charitable giving, we estimate demand for giving for various income groups and examine impacts of various income sources on giving. The findings indicate that the higher the share of wages and dividends in disposable income, the higher the amount of giving. The amount of giving is lower when the share of interest, capital gain, or pension income is higher.