Community Diversity and Donor Control: An Empirical Analysis of Contributions to Donor-Advised Funds at Community Foundations

Abstract

This study examines the relationship between community ethnic-racial diversity and contributions to donor-advised funds (DAFs) held by community foundations. Unlike general contributions, DAFs allow donors to retain advisory control over their fund distribution based on individual preferences. In contrast to prior research that generally finds that diversity dampens private provision of public goods, we show that greater ethnic-racial diversity is significantly associated with higher levels of contributions to DAFs at community foundations but not with general contributions. The findings contribute to the literature on diversity and public goods provision and have practical implications for the policy role of private philanthropy.