Faith and philanthropy: Megachurch scandals and charitable giving

Religious institutions receive the plurality of U.S. charitable contributions, but do their actions affect the total size of the charitable sector or simply the allocation of donations? I examine the impact of religious shocks on giving using a newly constructed database of megachurch scandals linked to itemized contributions data from the Internal Revenue Service. A scandal reduces local itemized contributions by 1.9 percent ($10 million) per year for at least three years. Contributions to non-church local charities are largely unaffected, indicating limited substitution between religious and secular philanthropy. However, declines in funds received by crisis pregnancy centers reveal close ties between megachurches and the anti-abortion/pro-life movement in the United States. Scandals also reduce religious service attendance, indicating that religious disengagement is an important channel through which scandals affect contributions.