Free Riding, Market Structure, and Church Member Donations in South Carolina

Abstract

The research on factors influencing member donations to churches is extensive. This paper uses unique data from South Carolina Baptists congregations to confirm much of the research, particularly including the potential for free-riding by members, but also extends that research by exploring the differential effect on donations of competition among Baptist congregations and competition between Baptist and non-Baptist congregations. The paper employs hierarchical linear modeling, rarely used in religious research but particularly well suited to the data, some of which is by congregation and some of which is by county. Previous empirical and theoretical work offers contradictory conclusions. We review the theory, clarifying some issues. Our results confirm that free riding increases as congregations grow larger, an effect mitigated by the increasing level of services offered as congregations grow. Importantly, competition between Baptist congregations reduces per member donations and competition with non-Baptist congregations increases per member donations.