On the market for charitable contributions three types of actors may be distinguished: First, donors make voluntary contributions to certain charitable causes. Second, charities provide collective goods which are financed by those contributions and at the same time charities influence giving behaviour by their fundraising activities. Third, the state is financially relieved by the private provision of collective goods and may foster charitable contributions through tax incentives.This project aims at exploring the interactions between these three actors in the setting of an extensive tax regime both theoretically and empirically. From a theoretical point of view, the focus is on the interaction between charities and benefactors. While donors have an interest in their contributions being completely used for the provision of the respective good, charities are likely to use a substantial amount of their revenues for fundraising activities. These diverging interests lead to strategic implications which impact the effects of tax incentives for donations. Empirically, the project is designed to evaluate the interaction of charities and donors within the framework of tax incentives with German data because there is a strong preoccupation of the literature with US data. There are only few empirical studies for countries like Germany, where social, cultural, scientific or religious public goods are financed mainly by taxes and contributions.