The Relationship between Public Subsidies and Unearned Revenues for Non-profit Organizations: Testing the Crowding-Out and Crowding-In Positions in the Czech Republic
The Relationship between Public Subsidies and Unearned Revenues for Non-profit Organizations: Testing the Crowding-Out and Crowding-In Positions in the Czech Republic

Summary/Abstract: Due to their heavy dependence on financial support from the public sector and close links to a wide range of government policies, non-profit organisations (NPOs) are becoming increasingly state-oriented. Although economic experts have striven to empirically test whether public funding of the non-profit sector (NPS) supports private philanthropy or, on the contrary, crowds-it out, there is no comprehensive research of this type within the Czech Republic. In connection with these blank areas in theories on the Czech non-profit sector, we pose the following question: How does public financing of NPOs influence the amount of private donations that these organisations receive? To answer this question, we conducted our own research (n = 483). The results demonstrate a crowding-out effect for public resources but not for other types of financing sources, such as revenues from the organisation’s own activity and commercial revenues.

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