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Prestige, charitable deductions and other determinants of alumni giving: Evidence from a highly selective liberal arts college

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  • Holmes, Jessica
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    Abstract

    Private institutions of higher education are highly dependent on alumni support to cover operating expenses, fund endowments and fuel large capital campaigns. For example, in 2004, alumni at private liberal arts colleges generated nearly 43% of total voluntary support and funded 21.5% of total institutional expenditures. This paper uses 15 years of detailed data on alumni donations to a private liberal arts college to explore a full range of potential determinants of giving. Results suggest that wealthy alumni who live in states that allow charitable tax deductions are more generous than otherwise similar alumni in states without such subsidies. Alumni contributions also increase in years when the college has achieved greater athletic prestige but fall when academic prestige rises. Furthermore, recent alumni are more influenced by institutional prestige than older graduates. With regard to other determinants, females tend to be more generous, as do alumni living in wealthier neighborhoods within 250 miles of the college. Alumni who have close alumni relatives tend to give more as do alumni who participated in campus activities during their college years. Undergraduate major and occupational sector are also strong predictors of giving behavior.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 28 (2009)
    Issue (Month): 1 (February)
    Pages: 18-28

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    Handle: RePEc:eee:ecoedu:v:28:y:2009:i:1:p:18-28

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    Web page: http://www.elsevier.com/locate/econedurev

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    Keywords: Educational finance Educational economics Resource allocation;

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    1. Harbaugh, William T, 1998. "The Prestige Motive for Making Charitable Transfers," American Economic Review, American Economic Association, vol. 88(2), pages 277-82, May.
    2. Sarah E. Turner & Lauren A. Meserve & William G. Bowen, 2001. "Winning and Giving: Football Results and Alumni Giving at Selective Private Colleges and Universities," Social Science Quarterly, Southwestern Social Science Association, vol. 82(4), pages 812-826.
    3. Clotfelter, C. T., 2003. "Alumni giving to elite private colleges and universities," Economics of Education Review, Elsevier, vol. 22(2), pages 109-120, April.
    4. Yoo, Jang H. & Harrison, William B., 1989. "Altruism in the market for giving and receiving: A case of higher education," Economics of Education Review, Elsevier, vol. 8(4), pages 367-376, August.
    5. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
    6. Gruber, Jonathan, 2004. "Pay or pray? The impact of charitable subsidies on religious attendance," Journal of Public Economics, Elsevier, vol. 88(12), pages 2635-2655, December.
    7. Charles T. Clotfelter, 1985. "Federal Tax Policy and Charitable Giving," NBER Books, National Bureau of Economic Research, Inc, number clot85-1, July.
    8. Monks, James, 2003. "Patterns of giving to one's alma mater among young graduates from selective institutions," Economics of Education Review, Elsevier, vol. 22(2), pages 121-130, April.
    9. Glazer, Amihai & Konrad, Kai A, 1996. "A Signaling Explanation for Charity," American Economic Review, American Economic Association, vol. 86(4), pages 1019-28, September.
    10. Wunnava, Phanindra V. & Lauze, Michael A., 2001. "Alumni giving at a small liberal arts college: evidence from consistent and occasional donors," Economics of Education Review, Elsevier, vol. 20(6), pages 533-543, December.
    11. Marr, Kelly A. & Mullin, Charles H. & Siegfried, John J., 2005. "Undergraduate financial aid and subsequent alumni giving behavior," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(1), pages 123-143, February.
    12. TA. Rhoads & S. Gerking, 2000. "Educational contributions, academic quality, and athletic success," Contemporary Economic Policy, Western Economic Association International, vol. 18(2), pages 248-258, 04.
    13. Jonathan Gruber, 2004. "Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance," NBER Working Papers 10374, National Bureau of Economic Research, Inc.
    14. Clotfelter, Charles T., 1985. "Federal Tax Policy and Charitable Giving," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226110486, January.
    15. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
    16. Gerald E. Auten & Holger Sieg & Charles T. Clotfelter, 2002. "Charitable Giving, Income, and Taxes: An Analysis of Panel Data," American Economic Review, American Economic Association, vol. 92(1), pages 371-382, March.
    17. C. R. Belfield & A. P. Beney, 2000. "What Determines Alumni Generosity? Evidence for the UK," Education Economics, Taylor & Francis Journals, vol. 8(1), pages 65-80.
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    Cited by:
    1. Jonathan Meer & Harvey S. Rosen, 2012. "Does Generosity Beget Generosity? Alumni Giving and Undergraduate Financial Aid," NBER Working Papers 17861, National Bureau of Economic Research, Inc.
    2. Jonathan Meer & Harvey S. Rosen, 2009. "Family Bonding with Universities," NBER Working Papers 15493, National Bureau of Economic Research, Inc.
    3. Hurwitz, Michael, 2011. "The impact of legacy status on undergraduate admissions at elite colleges and universities," Economics of Education Review, Elsevier, vol. 30(3), pages 480-492, June.
    4. Jonathan Meer & Harvey S. Rosen, 2011. "Does Generosity Beget Generosity? Alumni Giving and Undergraduate Financial Aid," Working Papers 1361, Princeton University, Department of Economics, Center for Economic Policy Studies..
    5. Jonathan Meer & Harvey S. Rosen, 2009. "Family Bonding with Universities," Working Papers 1163, Princeton University, Department of Economics, Center for Economic Policy Studies..
    6. Bae, Kee-Hong & Kim, Seung-Bo & Kim, Woochan, 2012. "Family control and expropriation at not-for-profit organizations: evidence from korean private universities," MPRA Paper 44029, University Library of Munich, Germany.

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