Did 9/11 Affect Donations to Islamic Charities in the United States?

Abstract

This article studies the impact of exogenous shocks on nonprofit operations by assessing the effect of 9/11 on donations to Muslim American nonprofits. The first narrative promoted by civil rights groups and some Islamic charities argues that donations to Islamic charities have declined. Individuals are afraid of getting indicted by law enforcement agencies for advertently or inadvertently funding an organization that supports terrorism. The second narrative is that donations to Islamic charities have increased post-9/11 as donors push back against Islamophobia by supporting Muslim nonprofits. I systematically assess these narratives using difference-in-difference (DiD) methodology and find that 9/11 had no significant impact on overall contributions to Islamic charities. Although donations to internationally focused Islamic charities declined in the year following 9/11, when compared with domestic-focused Islamic charities, they also recovered shortly after that. Moreover, they did not reduce significantly when compared with non-Islamic internationally focused organizations.