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Altruism and the Child-Cycle of Alumni Giving

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  • Jonathan Meer
  • Harvey S. Rosen

Abstract

This paper uses a unique data set to assess whether donors' contributions to a nonprofit institution are affected by the perception that the institution might confer a reciprocal benefit. We study alumni contributions to an anonymous research university. Inter alia, the data include information on the ages of the alumni's children, whether they applied for admission to the university, and if so, whether they were accepted. The premise of our analysis is simple: If alumni believe that donations will increase the likelihood of admission for their children and if this belief helps motivate their giving, then the pattern of giving should vary systematically with the ages of their children, whether the children ultimately apply to university, and the outcome of the admissions process. We refer to this pattern as the child-cycle of alumni giving. If the child-cycle is operative, one would observe that, ceteris paribus, the presence of children increases the propensity to give, that giving drops off after the admissions decision is made, and that the decline is greater when the child is rejected by the university. Further, under the joint hypothesis that alumni can reasonably predict the likelihood that their children will someday apply to the university and that reciprocity in the form of a higher probability of admission is expected, we expect that alumni with children in their early teens who eventually apply will give more than alumni whose teenagers do not. The evidence is strongly consistent with the child-cycle pattern. Thus, while altruism drives some giving, the hope for a reciprocal benefit plays a role as well. Using our results, we compute rough estimates of the proportion of giving due to selfish motives.

Suggested Citation

  • Jonathan Meer & Harvey S. Rosen, 2007. "Altruism and the Child-Cycle of Alumni Giving," NBER Working Papers 13152, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13152
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    References listed on IDEAS

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    1. 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.
    2. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
    3. Erik Schokkaert & Luc Van Ootegem, 1998. "Preference Variation and Private Donations," Public Economics Working Paper Series ces9808, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
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    5. 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.
    6. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
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    12. 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.
    13. Brendan M. Cunningham & Carlena K. Cochi-Ficano, 2002. "The Determinants of Donative Revenue Flows from Alumni of Higher Education: An Empirical Inquiry," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 540-569.
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    16. Frédéric Docquier & Hillel Rapoport, 2000. "Strategic and Altruistic Remittances," ULB Institutional Repository 2013/229586, ULB -- Universite Libre de Bruxelles.
    17. Charles T. Clotfelter, 1985. "Federal Tax Policy and Charitable Giving," NBER Books, National Bureau of Economic Research, Inc, number clot85-1, June.
    18. Katherine Olsen & Amy L. Smith & Phanindra V. Wunnava, 1989. "An Empirical Study of the Life-Cycle Hypothesis with Respect to Alumni Donations," The American Economist, Sage Publications, vol. 33(2), pages 60-63, October.
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    Cited by:

    1. Meer, Jonathan & Rosen, Harvey S., 2009. "The impact of athletic performance on alumni giving: An analysis of microdata," Economics of Education Review, Elsevier, vol. 28(3), pages 287-294, June.
    2. Lacetera, Nicola & Macis, Mario, 2008. "Social Image Concerns and Pro-Social Behavior," IZA Discussion Papers 3771, Institute for the Study of Labor (IZA).
    3. repec:pri:cepsud:162rosen is not listed on IDEAS

    More about this item

    JEL classification:

    • H49 - Public Economics - - Publicly Provided Goods - - - Other
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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