Confidence in Charitable Institutions and Volunteering

Abstract

Should we be concerned when the public’s confidence in charitable institutions declines? This research fills a gap in the literature regarding the relationship between volunteering and confidence in charitable institutions. It models volunteering as impure altruism—joint consumption of a public good (charity) and a private good (clubbiness). Confidence affects the consumption of the public good but not the private good. The feedback effect of volunteering on confidence is also considered. Low-confidence people may volunteer because they are asked and then gain confidence in charitable institutions by working with them. A two-equation bivariate probit model separately identifies the effect of confidence in charitable institutions on volunteering and the opposite effect of volunteering on confidence. Empirical results support hypotheses that recruiting a person to volunteer overrides a lack of confidence in charitable institutions and volunteering fosters confidence in charitable institutions. The latter effect is stronger thereby suggesting that declining confidence is self-correcting.