Understanding Individual Charitable Giving in Natural Disasters: Substitution, Persistence, and Targeting
(A2024-118689)

AUTHORS

Anirban Adhikary, Indian Institute of Management Udaipur; sai siddharth, Indian Institute of Management Ahmedabad; Sourav Borah, Indian Institute of Management Ahmedabad; Nikita Gupta, Indian Institute of Management Ahmedabad

ABSTRACT

Nearly every day, a natural disaster strikes some part of the world. Not-for-profits raise donations from individual donors to aid in disaster relief efforts. However, the impact of natural disasters on donations is unclear. This paper investigates whether natural disasters affect overall donations across both donors who donated and those who did not donate to disaster relief efforts. Importantly, this study investigates whether donors substitute donations from either non-disaster causes or their future donations to donate to disaster relief efforts. Utilizing longitudinal data of donors from USA, this paper shows that overall donations increase in the case of natural disasters. Donors do not substitute donations either from non-disaster causes or from future donations. These effects on overall donation and substitution effect persist even after prolonged exposure to natural disasters and across both donors who donate vs do note to natural disasters.