Abstract
In this thesis, I examine charitable behavior and the government's role in incentivizing donations. I build on the economic model of moral motivation by Brekke, Kverndokk, and Nyborg (2003). Individuals trade off personal benefit with a moral cost of not doing the right thing. The main novelty of this thesis is to let the individuals' "morally ideal donation" emerge endogenously as a Kantian equilibrium Roemer (2019). Furthermore, I generalize the model to heterogeneous preferences. I show that the optimal public intervention in the more complex heterogeneous setting is to set an incentive scheme for donations that balances efficient provision of public goods, individuals' moral costs, and the efficiency cost of behavioral responses.