Alumni donations and colleges’
development expenditures: Does spending matter?
In this article, authors William B. Harrison and Shannon K. Mitchell seek to investigate seemingly altruistic alumni donations to the college that they once attended. They rationalize that these donations are not in fact altruistic in nature, but that the alumni seek some sort of recognition for their donations. The question then, is what are the possible reasons and conditions that allow for this recognition: those things that the authors believe elicit fond memories. They explain alumni donations as a function of nine variables:
GREEK, PART, ATHLET, ALCOST, ENDOW, ENROLL, PLANGIV, RSDOC, and PUB (Explained below).
By running a regression on these variables, the authors determined the significance of each which can be seen in table 3. Finally, they concluded that while most other variables represented the eliciting of positive fond memories and thus higher alumni donation, that athletics did not have any significant effect on donation.
Explanation of Variables:
GREEK: Whether or not the alumnus was a member of a sorority or fraternity.
PART: Whether the student was part-time or full-time while in school.
ATHLET: Status of the school’s athletic programs: I, I-A, I-AA.
ALCOST: Alumni relations costs.
ENDOW: Endowment.
ENROLL: Enrollment level.
PLANGIV: Planned giving or bequests.
RSDOC: Whether the school was primarily research/doctoral.
PUB: Whether the school was public or private.
Source of Article:
Harrison, William B.;
Mitchell, Shannon K. American
Journal of Economics & Sociology. Volume
Authors’ Sources:
Andreoni, J.
and J. K. Scholz, 1990. "An Econometric Analysis of Charitable Giving
with Interdependent Preferences," Madison, WI: Social Systems Research
Institute, Workshop Series, Paper No. 9023, University of Wisconsin.
Becker, G. S.,
1974. "A Theory of Social Interactions,"Journal of Political
Economy, 82: 1063-1073.
Beeler, K. J.,
1982. "A Study of Predictors of Alumni Philanthropy in Private
Universities," PhD. dissertation, University of Connecticut.
Clark, B. R.,
1970. The Distinctive College: Antioch, Reed and Swarthmore, (Chicago: Aldine
Publishing Company).
Coelho, P, R.
P. and J. E. McClure, 1993. "Toward and Economic Theory of Fashion,"
Economic Inquiry, 31: 595--608.
Coelho, P. R.
P., 1985. "An Examination into the Causes of Economic Growth: Status as
an economic good," Research in Law and Economics, 7:89-116.
Council for
Advancement and Support of Education 1990. Expenditures in FundRaising Alumni
Relations, and Other Constituent (Public) Relations. Washington, D.C.
-----. 1989.
Research in Institutional Advancement: A Selected, Annotated Compendium of
Doctoral Dissertations Washington, D.C.
Council for
Financial Aid to Education (1986,1987,1988). Voluntary Support of Education
(1985-1986, 1986-1987, 1987-1988). New York.
Clotfelder, C.
and M. Feldstein, 1986. "Tax Incentives and Charitable Contributions in
the U.S.," Journal of Public Economics, 29: 1-26.
Coughlin, C.
C. and D. H. Erekson, 1984. "An Examination of Contributions to Support
Intercollegiate Athletics," Southern Economic Journal, 51: 180-195.
Dawkins, R.,
1989. The Selfish Gene, (Oxford: Oxford University Press).
Dembner, A.,
1995. "$25m in Budget Cuts, More Donations Sought," Boston Globe,
January 6, p. 31, col. 1.
Grimes, P. W.
and G. A. Chressanthis, 1994. "Alumni Contributions to Academics: The
Role of Intercollegiate Sports and NCAA Sanctions," American Journal of
Economics and Sociology, 53(I): 27-40.
Haddad, F. D.,
1986. "An Analysis of the Characteristics of Alumni Donors and Non-Donors
at Butler University," Ed.D. dissertation. Butler University.
Harrison, W.
B., 1995. "College Relations and Fund-Raising Expenditures: Influencing
the Probability of Alumni Giving to Higher Education," Economics of
Education Review, 14(1):
7384.
Harrison, W.
B. and S. P. Peterson, 1992. "Factor Analytic Scores as Discriminants of
Giving to Higher Education," Richmond, VA, Department of Economics,
Virginia Commonwealth University, Working Paper #92-10.
Hochman, H. M.
and J. D. Rodgers, J.D., 1973. "Utility Interdependence and Income
Transfers Through Charity," in Transfers in an Urbanized Economy (eds),
Boulding, K. E. et al. (Belmont), pp.63-77.
Hood, R. D.,
S. A. Martin, and L. S. Osberg, 1977. "Economic Determinants of
Charitable Donations in Canada," Canadian Journal of Economics, 10:
653-677.
Hsu, S., and
M. Tousignant, 1995. "Making Allen the Bad Man on Campus," The
Washington Post, January 30, p. B1, col. 3.
Keating, B.,
1981. "United Way Contributions: Anomalous Philanthropy," Quarterly
Review of Economics and Business, 21: 114-119.
Keating, B.,
R. Pitts, and D. Appel, 1981. "United Way Contributions: Coercion,
Charity or Economic Self-Interest?," Southern Economic Journal, 47:
816-823.
Keller, M. J.
C., 1982. "An Analysis of Alumni Donor and Non-Donor Characteristics at
the University of Montevallo," PhD. dissertation, University of Alabama.
Margolis, H,
1982. Selfishness, Altruism and Rationality, (Chicago: The University of
Chicago Press).
Okunade, A.
A., P. V. Wunnava and R. Walsh, Jr., 1994. "Charitable Giving of Alumni:
Microdata Evidence from a Large Public University," American Journal of
Economics and Sociology, 53: 73-84.
Olsen, K., A.
L. Smith, and P. V. Wunnava, 1989. "An Empirical Study of the Life-Cycle
Hypothesis with Respect to Alumni Donations," The American Economist, 33:
60-63.
Petersons's
Guides, 1994. "Petersons's Guide to Four-Year Colleges," (Princeton:
Peterson's Guides).
Pickett, W.
L., 1977. "An Assessment of the Effectiveness of Fund Raising Policies of
Private Undergraduate Colleges," Ph.D. dissertation, University of
Denver.
Schwartz, R.
A. 1970. "Personal Philanthropic Contributions," Journal of
Political Economy, 78: 1264-1291.
Walters, L,
1995. "Anti-crime Wave Shackles State Education Funding," Christian
Science Monitor, February 14, p. 3, col. 1.
White, H.,
1980. "A Heteroskedasticity-consistent Covariance Matrix Estimator and a
Direct Test for Heteroskedasticity," Econometrica, 48: 817-838.
Woods, J. L,
1987. "Factors Associated With Gift Income in Public Research and
Doctoral Granting Universities," Ph.D. dissertation, Washington State
University.
Yoo, J. H. and
W. B. Harrison, 1989. "Altruism in the Market for Giving and Receiving: A
Case of Higher Education," Economics of Education Review, 8: 367-376.