Economics & Finance / Economic Theory / Public Economics

Does Government Funding KILL Charity Donations? UK Study Reveals Shocking Truth (2013)

James Andreoni, Abigail Payne, Sarah Smith

Think government grants always crowd out private donations? Think again. This 2013 study by economists James Andreoni, Abigail Payne, and Sarah Smith turns conventional wisdom on its head. Using unique UK National Lottery data and a clever 'marginal winner-loser' comparison, they found that grants actually INCREASE total income for small and mid-sized charities by up to 47% over 4 years. But here's the kicker: for mega-charities over £5M, every £1 in grants leads to a staggering £30 loss in other income. The key? Grant purpose and charity size matter more than you think. This video breaks down the surprising results, why the UK differs from the US, and what it means for donors and policymakers. No jargon, just the raw data that'll change how you see charity funding.