because the grant crowds out the fund-raising of the charities who, after getting the grant, reduce efforts of fund-raising … (fund-raising crowd out)? This is the first paper to separate these two effects. Using a panel of more than 8,000 charities …, we find that crowding out is significant, at about 72 percent. We find this crowding out is due primarily to reduced fund-raising …

because the grant crowds out the fundraising of the charities who, after getting the grant, reduce efforts of fundraising … (fundraising crowd-out)? This is the first paper to separate these two effects. Using a panel of more than 8000 charities, we find … that crowding out is significant, at about 75%. We find this crowding out is due primarily to reduced fundraising …

of a second reason: that the stretegic response of the charity will be to pull back on its fundraising efforts after … receiving a grant. We develop a theoretical model to show a charity that chooses its level of fundraising efforts strategically … will reduce fundraising in response to government grants. We then analyze data on tax returns of 474 social services …