{"componentChunkName":"component---src-templates-post-query-tsx","path":"/blog-post/rice-is-a-501c3-public-charity/","result":{"pageContext":{"post":{"slug":"/blog-post/rice-is-a-501c3-public-charity/","title":"RICE is a 501(c)(3) public charity!","date":"May 17, 2011","timeToRead":2,"description":"","body":"function _extends() { _extends = Object.assign || function (target) { for (var i = 1; i < arguments.length; i++) { var source = arguments[i]; for (var key in source) { if (Object.prototype.hasOwnProperty.call(source, key)) { target[key] = source[key]; } } } return target; }; return _extends.apply(this, arguments); }\n\nfunction _objectWithoutProperties(source, excluded) { if (source == null) return {}; var target = _objectWithoutPropertiesLoose(source, excluded); var key, i; if (Object.getOwnPropertySymbols) { var sourceSymbolKeys = Object.getOwnPropertySymbols(source); for (i = 0; i < sourceSymbolKeys.length; i++) { key = sourceSymbolKeys[i]; if (excluded.indexOf(key) >= 0) continue; if (!Object.prototype.propertyIsEnumerable.call(source, key)) continue; target[key] = source[key]; } } return target; }\n\nfunction _objectWithoutPropertiesLoose(source, excluded) { if (source == null) return {}; var target = {}; var sourceKeys = Object.keys(source); var key, i; for (i = 0; i < sourceKeys.length; i++) { key = sourceKeys[i]; if (excluded.indexOf(key) >= 0) continue; target[key] = source[key]; } return target; }\n\n/* @jsxRuntime classic */\n\n/* @jsx mdx */\nvar _frontmatter = {\n  \"title\": \"RICE is a 501(c)(3) public charity!\",\n  \"date\": \"2011-05-17\",\n  \"template\": \"post\",\n  \"slug\": \"rice-is-a-501c3-public-charity\",\n  \"postedLink\": \"https://riceinstitute.org/blog/rice-is-a-501c3-public-charity/\",\n  \"old-tags\": [\"r-i-c-e-news\"],\n  \"description\": \"\",\n  \"tags\": \"Blog Post\",\n  \"banner\": \"\"\n};\nvar layoutProps = {\n  _frontmatter: _frontmatter\n};\nvar MDXLayout = \"wrapper\";\nreturn function MDXContent(_ref) {\n  var components = _ref.components,\n      props = _objectWithoutProperties(_ref, [\"components\"]);\n\n  return mdx(MDXLayout, _extends({}, layoutProps, props, {\n    components: components,\n    mdxType: \"MDXLayout\"\n  }), mdx(\"p\", null, \"We received our determination letter from the IRS yesterday: RICE is now officially a 501(c)(3) public charity. That means that it doesn\\u2019t have to pay income taxes, and donations to it are tax deductable (at least for people who itemize their deductions on their income taxes). 501(c)(3) status is also important because other organizations use it as an indicator of being a legitimate non-profit: it is a requirement for a non-profit account at PayPal, to apply for many government and foundation grants, and to have a fundraiser at On the Border, where the charity gets 10% of Tex-Mex sales.\"), mdx(\"p\", null, \"No doubt, RICE\\u2019s federal subsidization will soon have important implications for government debt. In the meantime, this seemed like a good occasion to consider the economics of charitable giving, reviewed this week \", mdx(\"a\", {\n    parentName: \"p\",\n    \"href\": \"http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.25.2.157\",\n    \"target\": \"_blank\",\n    \"rel\": \"noopener noreferrer\"\n  }, \"in the \", mdx(\"em\", {\n    parentName: \"a\"\n  }, \"Journal of Economic Perspectives\"), \" by John List\"), \". While it is not clear to me how recipients were categorized, List reports that 61 percent of giving by U.S. households is to \\u201Creligious causes,\\u201D followed next by to \\u201Chelp people in need\\u201D at a distant 10 percent.\"), mdx(\"p\", null, \"List finds that U.S. charitable giving is strongly associated with the performance of the stock market, but in an asymmetric way: \\u201Cindividual givers are significantly more responsive to macroeconomic improvements than to macroeconomic declines as defined by the S&P 500.\\u201D It makes sense that people would give more when the stock market makes them richer, but why don\\u2019t they give less when the market taketh away? One possibility List suggests is \\u201Csocial pressure to maintain past giving levels\\u201D \\u2013 once you start to give, you feel expected not to stop. \", \"[\", \"RICE donors: this means you!\", \"]\", \" Interestingly, variations in the stock market do not much matter for religious giving; the S&P 500 has a much bigger effect on other causes, such as education.\"), mdx(\"p\", null, \"Part of List\\u2019s point is to admit that \\u201Cmany economic facts concerning the charitable market remain unknown\\u201D and to rally future research: charitable giving has never been a central issue in economics. But, especially in an age of profound income inequality, maybe it should be. As Diane wrote about a few weeks ago, it is often difficult to figure out what \\u201Cworks\\u201D among programs intended to help the poor, and sometimes it is difficult to even understand what \\u201Cworking\\u201D means for a program that nobody intends to implement. Thinking about the economics of charitable giving adds another layer to the problem: of an extra dollar given to an average non-profit, how much more does it spend on its programs?\"), mdx(\"p\", null, \"If the program is well-managed but facing a tight budget constraint, the answer might be that spending goes up dollar-for-dollar, certainly the outcome most of us have in mind when we give money. But it could be otherwise. Imagine the opposite extreme: a fundraiser hired by the organization is required to raise a certain amount of money each month. The extra dollar you give simply means that he does not have to work so hard to get there.\"), mdx(\"p\", null, \"There are surely organizations of both types and everything in between. The point is that non-profits should be subject to economic analysis just like firms and governments, and that we should be only carefully optimistic about charitable organizations. List cites a statistic that \\u201Ccharitable organizations spend an average of nearly $100,000 on fundraising.\\u201D Luckily, we need not yet worry too much about RICE: we are scarcely able to imagine one day spending that much a year on \", mdx(\"em\", {\n    parentName: \"p\"\n  }, \"anything\"), \".\"), mdx(\"p\", null, \"Some of the organizations that I have met and admired most have stayed relatively small. Perhaps \\u2013 if we believe in economists\\u2019 \\u201Claw of diminishing marginal utility\\u201D \\u2013 donations will do more good if given to smaller organizations, as long as those organizations are capable of doing the work?\"));\n}\n;\nMDXContent.isMDXComponent = true;","tags":[{"name":"Blog Post","slug":"blog-post"}],"banner":null}}},"staticQueryHashes":["318001574","3787687951","3787687951"]}