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The Effect of University Endowment Growth on Giving: Is There Evidence of Crowding Out?


  • Sharon M. Oster

    () (School of Management)


In the late 1990's, the average university endowment has experienced extraordinary growth. This paper investigates the effects of this growth on donations. In particular, the paper focuses on whether or not donations by particular kinds of donors are "crowded out" by endowment growth. A simple model of donor behavior is developed which takes account of the multiple objectives of those donors, and concludes that different types of donors are more or less responsive to endowment growth. These models are then tested using data provided by the Council on Aid to Education on a wide range of colleges and universities. Cross sectional work on the 1999 data is supplemented by fixed-effects analysis using a panel from the early 1980's to 1997. The results suggest that in the very recent period there has been some crowding out and that this effect is most pronounced among particular categories of donors.

Suggested Citation

  • Sharon M. Oster, 2001. "The Effect of University Endowment Growth on Giving: Is There Evidence of Crowding Out?," Yale School of Management Working Papers ysm194, Yale School of Management.
  • Handle: RePEc:ysm:somwrk:ysm194

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    Cited by:

    1. Ehrenberg, R. G. & Smith, C. L., 2003. "The sources and uses of annual giving at selective private research universities and liberal arts colleges," Economics of Education Review, Elsevier, vol. 22(3), pages 223-235, June.

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    JEL classification:

    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise


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