Toward a theory of charitable fund-raising

Private providers of public goods, such as charities, invariably enlist fun d-raisers to organize and collect contributions. Common in charitable fund- raising is seed money, either from a government grant or from a group of "l eadership givers," that launches the fund drive and generates additional gi fts. This paper provides a theoretical basis for fund-raisers and seeds to charity. The primary assumption is that there is a range of increasing retu rns at low levels of provision of the public good. It is shown that fund-ra isers have a natural and important role, and that some times only a small a mount of seed money can grow into a substantial charity.