The Effect of a Recession on the Volunteer Workforce and Donation Activity in the United States

The non-profit sector is an important and integral part of the American Economy. During a recession, the demand for both the volunteer workforce and monetary donations increases. In our paper, we analyze the effect of a recession on the supply of volunteer hours and donations in the United States. We hypothesize that supply of both volunteer hours and donations will increase during a recession, because the intrinsic motivations will continue to outweigh the extrinsic motivations as prior to the recession. We develop a model to replicate the individual’s decision making and determine that the effect of a recession on volunteering and donations depends on the level of altruistic motivation present during these times. The empirical analysis rejects our hypothesis. The extrinsic motivations dominate the intrinsic motivations in times of economic distress. During a recession, donations decrease. However, there is no significant change in volunteer hours