Philanthropy in a Secular Society

We investigate the relationship between religious and charitable giving. We find crowding in between the German church tax and charitable giving for church members, but not for church leavers. In contrast to church members, donations of church leavers and nonmembers are also highly responsive to the tax deductibility. Additionally, nondonors exhibit a significantly increased probability of leaving their church compared to donors. Finally, leaving the church increases donations on the extensive margin but decreases them along the intensive margin. Our results suggest that a more secular society may lead to diminished donations through a declining crowding-in effect of religious giving on other charitable donations.