RACE AND CHARITABLE CHURCH ACTIVITY

I. INTRODUCTION Faith-based organizations provide social services for more than 70 million Americans annually (Johnson, Tompkins, and Webb 2002). Of the more than 350,000 congregations in the country, more than 85% support some type of social service activity (Solomon 2003). Biddle (1992) estimates that each year, congregations spend 24 billion dollars on philanthropic activities. These actions have gained new relevance for policymakers as the availability of public funding for charitable church activity has dramatically increased in the past decade. Starting with the "charitable choice" provision of the 1996 welfare reform law and continuing with the creation of Centers for Faith-Based and Community Initiatives located in 11 different federal agencies, policymakers have instituted a "devolution" of federal funds intended to provide community services. In 2005, more than 2.1 billion dollars in government grants were awarded to religious organizations by federal agencies (Office of the Press Secretary 2006). (1) Some observers fear that this policy trend will encourage racial discrimination by congregations (Leonard 2002). As Bartkowski and Regis (2003) write, "Congregational definitions of legitimate [social] problems that members care about are, in actuality, influenced by various considerations--among them, racialized perceptions of welfare recipients." Past studies by economists have postulated, but not substantiated, that churchgoers warrant special consideration as individuals whose actions are sensitive to community demographics (e.g., Alesina and La Ferrara 2000; Gruber 2005). Alternately, some policymakers have championed faith-based organizations because they are not likely to display sensitivity to community demographics when providing services. As President Bush stated in a speech in 2002, "Faith-based charities work daily miracles because ... above all, they recognize the dignity of every citizen and the possibilities of every life" (Office of the Press Secretary 2002). John DiIulio, the former director of the White House Office of Faith-Based and Community Initiatives, argued for charitable choice by saying, "government at all levels blatantly denies the equal protection of the laws to low income, urban African American and Latino children and families who depend disproportionately on faith-based organizations for both basic life necessities and the delivery of specific social welfare benefits" (DiIulio 2002). There is also (noneconomic) research consistent with this view (e.g., Billiet 1995; Johnson 1977). The goal of this article was to examine whether congregations are affected by the racial composition of the local community when deciding whether and how much charitable activity to provide. Exploring this relationship is valuable not only because it addresses a key policy debate but also because it contributes to existing economic work on diversity and redistribution. Much prior work on socioeconomic conditions and tastes for redistribution relies on hypothetical questions asked to respondents in the General Social Survey or in Gallop Polls (examples include Alesina and La Ferrara 2005b; Luttmer 2001; Fong 2001). This article examines how a community's racial composition affects actual charitable expenditures. Studying actual charitable activities will be valuable if individuals' stated preferences are different from their actual preferences or if stated preferences are sensitive to the wording of a question (as is the case in Alesina and La Ferrara 2005b). To investigate the effect of race on charitable church activity, we compare how racially homogeneous congregations respond to the community's racial composition relative to other congregations. Several factors support this approach. First, members of homogeneous congregations have ostensibly taken race into account when selecting a congregation to attend; consequently, these congregations may be especially likely to display sensitivity to a community's racial composition when providing charitable services. …