This paper gives an explanation why government and large contributors aoften make contributions to a a charity in-kind rather in cash. We consider a charity that produces a public good a strictly concex production technology and with more than one factor of production.

We consider taxes on firms which engage in rent-seeking contests. The taxes can be on realized profits or on rent-seeking expenditures, and the firms can engage in a context where either the hoghest bidder wins the prize, or else a firm's probability of winning equals the ratio of its...