Abstract
The government has the responsibility of providing a social service to its citizens. It decides whether to award funds to a religious nonprofit, secular nonprofit, or to produce the service itself. Religious charities are willing to provide the service at lower costs if they can use the funds as an opportunity to proselytize their doctrine. This proselytizing alters the religious preferences of believers in society. In a situation of equal grants to religious charities, this has the consequence of reducing the number of extremists. Furthermore, conservative religious denominations may discriminate against non-religious individuals in the provision of the social service.
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Notes
The literature on the economics of nonprofits and altruistic behavior has developed substantially over the years in the areas of economic theory and empirical research. Rose-Ackerman (1996) states that many theories have been developed to explain the motives behind charitable donations, ranging from donations driven by a sense of commitment as in Sen (1977) and Sugden (1984), to donations driven by the intention of signaling one’s wealth to others as in Glazer and Konrad (1996). Andreoni (1990) also presented another explanation for altruistic behavior based on the desire to gain utility from the act of giving, referred to as the warm-glow effect. Additional literature has focused on the economic behavior of nonprofit institutions in particular, such as Rose-Ackerman (1996), Steinberg and Gray (1993), and Weisbrod (1989).
Much of the empirical work has focused on testing the hypothesis of the crowding out of private contributions by public spending with results ranging from complete crowding out as in Roberts (1984), Sugden (1982) and Warr (1982), to partial crowding out as in Steinberg (1987) and Andreoni (1990). With regards to the effectiveness of nonprofits, Rose-Ackerman (1996) states that initial studies such as Clarkson and Martin (1980) concluded that for-profits were more efficient than nonprofits due to the advantage that the profit motive presents. Others, such as Hawes and Phillips (1986) and Aaranson et al. (1994), concluded using data from nursing homes, that the lack of the profit incentive served as an advantage for nonprofits over competing agencies. Also, Rose-Ackerman (1996) argues that some studies such as Kagan (1991) conclude that for-profits provide services at a lower cost but also at a lower quality.
A careful examination of the methods by which religious charities convey religious messages or doctrine as part of their social service delivery process is done by Unruh (2004). One method, that she calls religious self-descriptions, is through printed media such as program descriptions, brochures, pamphlets, etc. Another method is through religious objects present in the surrounding environment. This may include wall pictures, architecture of the buildings, artifacts, etc. The religious music played may also have a spiritual effect on the recipients of social services (Unruh 2004). In addition to these subtle and indirect ways, more direct methods can be employed such as prayers for the recipients, reading religious text or quotations out loud, and participation in group worship (Unruh 2004). Also, the staff can also have an effect through their dress codes, manner of conduct, and their informal conversations with the consumers or recipients of this social service.
Similar to the religious human capital method used by Smith and Sawkins (2003), the formation of preferences represents a long period of learning by the individual in his/her interactions in the society. It also represents an accumulation of parental investment decisions over time, in addition to the cumulative influence of the social and cultural environment. We assume that the individual has been primarily exposed to the influence of only one denomination.
In his survey of the literature on economics of religion, Iannaccone (1998) remarks that most measures of religious involvement such as voluntary contributions or participation in religious activities are positively related to the level of religiosity in the denomination. For example, he states, “[that] the members of liberal Protestant denominations contribute a relatively small proportion of their income to churches (around 1.5 %), whereas the members of conservative Protestant denominations, such as the Southern Baptists and the Assemblies of God, contribute significantly more (between 2 % and 4 %), and Mormon contributions average 6 % of income” (Iannaccone 1998). Furthermore, he states that religious involvement in terms of, “rates of church attendance, follow a similar pattern, with liberal Protestant denominations ranking lowest, conservative Protestants attending more, and sect members, such as Mormons and Jehovah’s Witnesses, attending still more (Hoge and Yang 1994; Iannaccone 1992, 1994).” In a statistical survey on the determinants of religious participation, Iannaccone (1998) comments that, “members of conservative and sectarian denominations attend and give much more than members of liberal denominations even after controlling for socioeconomic differences.”
Awarding one denomination more funds is a similar situation to funding only one denomination.
Barros and Garoupa (2002) label a similar group as the ‘non-church’.
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Reda, A. Religious Charities and Government Funding. Int Adv Econ Res 18, 331–342 (2012). https://doi.org/10.1007/s11294-012-9358-z
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DOI: https://doi.org/10.1007/s11294-012-9358-z