The Sensitivity of Charitable Giving to the Timing and Salience of Tax Credits
Melbourne Institute Working Paper No. 02/19
Date: January 2019
Author(s):
Abstract
If a taxpayer is able to claim charitable donations made near the time of filing her tax return, will she give more? To what extent does the salience of tax-induced incentives matter? This paper explores the role of the timing and salience of tax incentives on reported tax filer giving. As a result of the January 12, 2010 Haiti Earthquake, taxpayers in Quebec, Canada were given an opportunity to report donations that were made near the time of filing on their 2009 tax returns, while taxpayers located elsewhere in Canada were not given this opportunity. We find that moving the timing of reporting of gifts on one’s tax returns closer to the timing of giving increases average donations by approximately 9 percentage points. We discuss the policy implications of our results along with the implications for our understanding of the tax price elasticity of charitable giving.