Research in higher education fund-raising has increased substantially for several years. In the early 1980s only a few empirical works were available, spread sporadically over more than 20 years. Most pertinent, up-to-date research concerning U.S. fund raising came from the Filer Commission of the 1970s, and its research applied to voluntary support overall, not to higher education specifically. Today there is a fairly good, though not overabundant, literature concerning donor behavior. More is on the way.
The more fruitful approach is to build a model to "predict" fund-raising effectiveness and then insert an institution's variable values. The model can help to determine whether an institution is collecting more, or less, than the average institution.
For instance, John Dunn, Jr., and Associates selected the Top 50 institutions in terms of total voluntary support and "leverage". They determined that the size of endowment and operating budget were the major factors in raising funds, but that leverage was not explained at all well by the variables.
The strong power of prediction endowment size has suggested that successful fund-raisers build fund-raising traditions through tried and true strategies. The explanatory power of high educational and general budgets was taken to reflect the relations between large budgets and institutional prestige. During the seven years examined by Dunn and Associates, the largest amounts were raised, in order, by Harvard, Stanford, Yale, Cornell, Columbia, Minnesota, the Massachusetts Institute of Technology, the University of Southern California, Princeton and Pennsylvania. Rates of increase were greatest at Washington University, Cal Tech, Penn State, Ohio State, Virginia, Carnegie-Mellon, and Washington, Georgia, Illinois, and Stanford universities. Leverage was greatest at small, mostly church related colleges.
Coughlin and Erekson (1986) selected 52 universities from major athletic conferences, plus certain independents, and related both state aid and voluntary support to four measures of athletic success: winning football and basketball percentages, and National Collegiate Athletic Association and television appearances. The authors found that the amount of state aid per student associated positively with athletic variables, particularly basketball success. They showed that athletic success resulted in larger contributions to athletic programs (1984, 1985). They also demonstrated spillovers to academic programs, showing that corporate and alumni donations to both current and capital funds associated positively with athletic success (1986).
Because good data for higher education is lacking, it is necessary to borrow estimates of tax code effects upon giving from the public sector overall, and then try to predict what the effect on higher education might be. This is important because the voluntary support of the wealthy is crucial to higher education. The top one percent of taxpayers was responsible for 68 percent of all giving to education in 1962 (the only year of available IRS data). There are no strong reasons to believe, however, that behaviors for overall giving are similar to those for higher education. Donors probably view donations to churches and hospitals, for example, as taking precedence over giving to colleges and universities.
While the tax law revisions were under discussion, Auten and Rudney (1986) used overall "elasticities" (comparing how a percentage change in one factor might affect a percentage change in another factor) to estimate the effects of proposed tax law changes on higher education giving. They concluded that donations from the most wealthy could decline by as much as 61% overall. They estimated general declines of 23 to 39%. They observed, however, that corresponding declines did not occur after the tax law changes of 1982.
Of particular interest is Weisbrod's approach to factors influencing voluntary giving. He dispelled the notion that donors will stop contributing if the opportunity for a "free ride" (others will pay) exists. After studying 16 econometric (economic-statistical) studies, he concluded that a tax increase of 10 percent may result in philanthropic declines of as little as .1 percent, or as much as 2.54 percent. Comparing the effects of donor knowledge of fund-raising costs with donor willingness to give, he further concluded that the effects can be quite negative.
Additionally, Weisbrod's examination of the fundamental motives or goals of nonprofits found that they seek primarily to generate as large a budget as possible. Regarding whether governmental spending can "crowd out" private donations, he answered that cash transfers to the poor crowd out private giving, whereas spending on social services such as health and housing have the opposite effect.
About two years ago, the research committee of the Council for Advancement and Support of Education (CASE) appropriated $10,000 to begin preliminary work on building such a data base. The Center for Philanthropy followed with an equal contribution. The initial effort studied the nature of data colleges and universities maintain in files. It was hoped that existing files could be added to, or improved, to yield a broad sample of donors to many institutions.
Unfortunately institutions' files are severely lacking. Indeed, if the institutions are representative--and there are good reasons to believe they are--U.S. higher education institutions know almost nothing about their donors. In short, the utility of existing data sources nearly is depleted. Before additional advances in knowledge can be made, a national donor database must be built and maintained.
Auten, Gerald E., and Rudney, Gabriel. 1986. "Tax Reform and Individual Giving to Higher Education." Economics of Education Review 5:167-78.
Coughlin, C.C., and Erekson, O.H. 1986. "Determinants of State Aid and Voluntary Support of Higher Education." Economics of Education Review 5:179-90.
Coughlin, C.C., and Erekson, O.H. 1985. "Contributions to Intercollegiate Athletic Programs: Further Evidence." Social Science Q. 66:194-202.
Coughlin, C.C., and Erekson, O.H. 1984. "An Examination of Contributions to Support Intercollegiate Athletics." 5th Economic Journal 51:180-95.
Dunn, John A., Jr.; Terkla, Dawn Geronimo; and Secakusuma, Peter. 1988. "Fund Raising in U.S. Colleges and Universities: TheFifty Best Performances, 1979-80 through 1985-86." Tufts University. Paper prepared for the Twenty-Third Annual Conference of the Society for College and University Planning.
Duronio, Margaret, et al. April 1988. "A Survey of Fund-Raising Methods: Implications for Management." Paper prepared for the Annual Meeting of the American Educational Research Association. ED 296 651.
Leslie, Larry L., et al. Fall 1983. "Factors Accounting for Variations Over Time in Voluntary Support for Colleges and Universities." Journal of Educational Finance 9:213-25.
Leslie, Larry L. and Ramey, Garey. 1988. "Donor Behavior and Voluntary Support for Higher Education Institutions." Journal of Higher Education 59:117-32.
Loessin, Bruce A.; Duronio, Margaret A.; and Borton, Georgina L. 1988. "Understanding Fund-Raising Effectiveness in Higher
Education: Laying a Foundation." Final report prepared for Exxon Education Foundation.
Weisbrod, Burton A. 1988. The Non-Profit Economy. Cambridge, Massachusetts: Harvard University Press.