The impact of the national endowment for the arts in the United States: institutional and sectoral effects on private funding

This paper examines the impact of the National Endowment for the Arts on private donations to the arts. The aim of the analysis is to assess whether public funding generates a crowding effect on private giving. We distinguish between institutional and sectoral crowding phenomena and discuss their possible implications.We used both a qualitative approach and an econometric model to estimate the effect of NEA introduction and appropriations on donations. Our results suggest that at the institutional level NEA grants do not generally induce donations to recipients while at the sectoral level appropriations and private giving are independent. The introduction of the agency appears to have caused a decrease in donations.