Wednesday, November 30, 2011

Diversity Diminishes Donations

In an interesting study of how ethnic and religious diversity affects charitable giving, researchers from the National Bureau of Economic Research report that the more diverse the neighborhood, the less money households there give to charity. "A 10 percentage point increase in ethnic diversity reduces donations by 14 percent, and a 10 percentage point increase in religious diversity reduces donations by 10 percent," the authors report. Diversity reduces the dollars individual households give to charity, not the share of household that give.

Who is closing their wallets? As ethnic diversity increases in a neighborhood, non-minority households give less. As religious diversity increases in a neighborhood, Catholic households give less. The authors suggest that as North America (the study was undertaken in Canada) becomes increasingly diverse, charities may get less.

Source: National Bureau of Economic Research, Diversity and Donations: The Effect of Religious and Ethnic Diversity on Charitable Giving, NBER Working Paper 17618, $5

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