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Essays on Philanthropy
Svítková, Katarína ; Ortmann, Andreas (vedoucí práce) ; Bekkers, René (oponent) ; Bilodeau, Marc (oponent)
My thesis explores two aspects of philanthropy, the problem of asymmetric information between donors and the charities they support and corporate philanthropy in the Czech and Slovak Republics. The topics were inspired by real life problems observed in these countries, namely, the lack of trust in and information about nonprofit organizations and the need to inspire new, local donors to replace the disappearing foreign funding of nonprofit organizations. The first two chapters of my thesis deal with the problem of asymmetric information that arises between donors and the charities they support. I focus on one particular solution to this problem, certification, a mechanism where an independent agency evaluates the charities that voluntarily apply for certification and pay a fee. The certificate serves as a signal of quality. The first chapter, co-authored with Andreas Ortmann, addresses the question of a certifier's motivation and the welfare implications of this institution. We compare the behavior of a nonprofit and a for-profit certifier and analyze the welfare consequences in both cases. We observe that a profit-maximizing certifier is able to divert all funds from the charities to himself without providing any service to the market or increasing the welfare. The nonprofit certifier, on the...
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