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Abstract

Taxpayers are able to deduct from taxable income charitable contributions made in either cash or noncash forms. This study examines how the different tax prices of cash and noncash charitable gifts affect the mix of cash and noncash charity, using data from a balanced panel of taxpayers that allows panel data estimation techniques to account for any individual specific effects that may influence the mix of contributions. The article finds that taxpayers are quite responsive in their charitable giving mix to changes in the tax prices. An increase in the relative price of noncash to cash gifts leads to a significant decrease in the proportion of gifts in the noncash form, with an elasticity that often exceeds -1.0.

Keywords

charitable contributions noncash donations cash donations taxation

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An Empirical Examination of the Factors that Influence the Mix of Cash and Oncash giving to Charity

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