The Energy Boom: Boon or Bane for Local Philanthropy?

Abstract

Objective This article explores the complex relationships between the energy boom, community economic and demographic conditions, and local philanthropy. This study aims to find direct effects of the energy boom and indirect effects of multiple mediators—community economic conditions, population change, racial diversity, and income inequality—on local philanthropy.

Methods Drawing upon data from U.S. counties, a series of mediation analyses are tested by following Baron and Kenney's (1986, Journal of Personality and Social Psychology 51(6):1173) causal‐steps procedures.

Results The energy boom always has negative direct effects on local philanthropy. Although indirect effects of mediators are not always significant, total effects, as the sum of direct and indirect effects, reveal that income, population growth, and racial diversity positively mediate negative effects of the energy boom on local philanthropy. The energy boom increases levels of income inequality; however, increased income inequality paradoxically is positively associated with local philanthropy.

Conclusion The relationship among the energy boom, community economic and demographic conditions, and local philanthropy is complex. Although direct effects of the energy boom are negative, key findings of positive indirect effects suggest implications for policymakers, nonprofit practitioners, and community leaders when dealing with grand societal challenges caused by natural resource development at the community level.