Personal Philanthropic Contributions

Abstract

This paper focuses upon the charitable donations of individuals. Its purpose is to integrate personal philanthropic activity into traditional utility theory, and to determine the effects income and price have on taxdeductible giving. We recognize that charitable contributions might be an expression of truly philanthropic sentiments; on the other hand, a donor might be more interested in the goodwill a charitable act can gain for himself than in the benefits it might bring to others. Thus, the empirical analysis presented here is designed to illuminate the extent to which "philanthropic" behavior is truly influenced by the needs of others. Recognition of charity's philanthropic orientation suggests several insights into consumer theory. Economic man is no longer recognized as living in social isolation, where (as traditional presentation of utility theory might suggest) income allocation decisions are made with reference to solely personal needs and wants. Part I presents the theoretical formulation which underlies the empirical analysis, Part II defines the variables and the regression model employed, and Part III examines the regression results.