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A quantitative analysis of charitable causes in 20th century England

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Abstract:

This paper uses data on the population of charities in England and Wales to quantitatively analyse patterns in the relative popularity of charitable causes in England and Wales over period of more than 100 years.

Charities serve many different causes from the arts to zoological institutions. These organizations play an important role in an economy, providing goods and services which markets fail to provide at optimal levels. Such organisations have received a great deal of attention from economists for decades and there is a large literature discussing various elements of the sector and the behavior or charitable organisations. There are, however, two issues which this sizable literature has generally failed to address.

First , much of the work on the economics of charities neglects possible heterogeneity across the charitable cause which organisations serve (e.g. animals, elderly). When studying the behaviour of charities, rarely have cause-specific characteristics been allowed for explicitly. For example, philanthropists looking to establish a charity must consider which charitable cause to serve, which population’s welfare they wish to enhance. Fundraisers for a charity working with children, say, will compete for donations with not only fundraisers at other children’s charities but also fundraisers from charities serving other populations (e.g. animals). We explicitly address the question of how the growth of different charitable causes relate to one another.

The second issue often neglected due to the unavailability of data is the study of the charitable sector over the long run. Recent studies (Atkinson et al., forthcoming) have begun to consider the behavior of charities over longer time spans, though even these tend to be restricted to a few decades. Our data allow us to study the development of the charitable sector over more than a century.

This study seeks to contribute to the literature by addressing both of these issues by analysing the relative popularity of different charitable causes over more than a century by studying when charities were first established. To do so, we have developed a methodology to extract, from the governing documents of more than 200,000 registered charities, an approximation of the date at which individual charities were first established (rather than the date at which they were registered with the Charity Commission, an essential distinction). While the entry of new charities into the sector has been looked at before (Backus and Clifford, 2010; Harrison and Laincz, 2008) the periods consider do not exceed 15 years. Our data allow us to consider changes in the relative popularity of different charitable causes in England and Wales since 1900.

To provide context to the quantitative work, we undertake a review of the history of the formal charitable sector in England and Wales in the 20th century. We then develop a simple theoretical framework in which to understand the decision of “philanthro-preneurs” to establish a charity serving a particular cause.

Rather than examining the actual number of charities founded in a given year, we instead consider the share of all charities founded in a year that serve a particular cause. This measure of the relative popularity of charitable causes is revealing insofar as it allows us to look at, for the first time, how trends and patterns in the causes served by the charitable sector develop over the very long run. While the absolute numbers of charities serving each cause increase almost monotonically over the period, we find evidence that the relative popularity of some causes has waxed over time while that of others has waned, albeit not always monotonically. We then seek to relate the observed trends to the underlying dynamics of the British economy such as economic growth and public spending.

References

ATKINSON, A. B., P. G. BACKUS, J.MICKLEWRIGHT, C. PHAROAH, AND S. V. SCHNEPF (forthcoming): “Charitable Giving for Overseas Development: UK Trends Over a Quarter Century,” Journal of the Royal Statistical Society, Series A

BACKUS, P. G. AND CLIFFORD, D. (2010): “Trends in the concentration of income among charities”, Third Sector Research Centre Working Paper, No. 38

HARRISON, T., AND C. LAINCZ (2008): “Entry and Exit in the Nonprofit Sector,” The B.E. Journal of Economic Analysis & Policy, 8(1).
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Backus, Peter. "A quantitative analysis of charitable causes in 20th century England" Paper presented at the annual meeting of the ISTR 10th International Conference, Universita Degli Studi Di Siena, Siena, Italy, Jul 10, 2012 <Not Available>. 2014-09-12 <http://citation.allacademic.com/meta/p552215_index.html>

APA Citation:

Backus, P. , 2012-07-10 "A quantitative analysis of charitable causes in 20th century England" Paper presented at the annual meeting of the ISTR 10th International Conference, Universita Degli Studi Di Siena, Siena, Italy Online <APPLICATION/PDF>. 2014-09-12 from http://citation.allacademic.com/meta/p552215_index.html

Publication Type: Full Research Paper
Review Method: Peer Reviewed
Abstract: This paper uses data on the population of charities in England and Wales to quantitatively analyse patterns in the relative popularity of charitable causes in England and Wales over period of more than 100 years.

Charities serve many different causes from the arts to zoological institutions. These organizations play an important role in an economy, providing goods and services which markets fail to provide at optimal levels. Such organisations have received a great deal of attention from economists for decades and there is a large literature discussing various elements of the sector and the behavior or charitable organisations. There are, however, two issues which this sizable literature has generally failed to address.

First , much of the work on the economics of charities neglects possible heterogeneity across the charitable cause which organisations serve (e.g. animals, elderly). When studying the behaviour of charities, rarely have cause-specific characteristics been allowed for explicitly. For example, philanthropists looking to establish a charity must consider which charitable cause to serve, which population’s welfare they wish to enhance. Fundraisers for a charity working with children, say, will compete for donations with not only fundraisers at other children’s charities but also fundraisers from charities serving other populations (e.g. animals). We explicitly address the question of how the growth of different charitable causes relate to one another.

The second issue often neglected due to the unavailability of data is the study of the charitable sector over the long run. Recent studies (Atkinson et al., forthcoming) have begun to consider the behavior of charities over longer time spans, though even these tend to be restricted to a few decades. Our data allow us to study the development of the charitable sector over more than a century.

This study seeks to contribute to the literature by addressing both of these issues by analysing the relative popularity of different charitable causes over more than a century by studying when charities were first established. To do so, we have developed a methodology to extract, from the governing documents of more than 200,000 registered charities, an approximation of the date at which individual charities were first established (rather than the date at which they were registered with the Charity Commission, an essential distinction). While the entry of new charities into the sector has been looked at before (Backus and Clifford, 2010; Harrison and Laincz, 2008) the periods consider do not exceed 15 years. Our data allow us to consider changes in the relative popularity of different charitable causes in England and Wales since 1900.

To provide context to the quantitative work, we undertake a review of the history of the formal charitable sector in England and Wales in the 20th century. We then develop a simple theoretical framework in which to understand the decision of “philanthro-preneurs” to establish a charity serving a particular cause.

Rather than examining the actual number of charities founded in a given year, we instead consider the share of all charities founded in a year that serve a particular cause. This measure of the relative popularity of charitable causes is revealing insofar as it allows us to look at, for the first time, how trends and patterns in the causes served by the charitable sector develop over the very long run. While the absolute numbers of charities serving each cause increase almost monotonically over the period, we find evidence that the relative popularity of some causes has waxed over time while that of others has waned, albeit not always monotonically. We then seek to relate the observed trends to the underlying dynamics of the British economy such as economic growth and public spending.

References

ATKINSON, A. B., P. G. BACKUS, J.MICKLEWRIGHT, C. PHAROAH, AND S. V. SCHNEPF (forthcoming): “Charitable Giving for Overseas Development: UK Trends Over a Quarter Century,” Journal of the Royal Statistical Society, Series A

BACKUS, P. G. AND CLIFFORD, D. (2010): “Trends in the concentration of income among charities”, Third Sector Research Centre Working Paper, No. 38

HARRISON, T., AND C. LAINCZ (2008): “Entry and Exit in the Nonprofit Sector,” The B.E. Journal of Economic Analysis & Policy, 8(1).

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