Twenty-five Years of Giving: Using a National Data Set to Examine Private Support for Higher Education

• Main Author: Frank, Karen Ann
• Format: Others
• Published: Scholar Commons 2014
• Subjects: balance wheel theory; economic indicators; fundraising; resource dependence; Curriculum and Instruction
• Online Access: https://scholarcommons.usf.edu/etd/5373; https://scholarcommons.usf.edu/cgi/viewcontent.cgi?article=6555&context=etd

Resource dependencies have increased substantially at colleges and universities over the years due to economic declines, recessionary periods, and decreased funding from state allocations. The purpose of this study was to advance an understanding of private support for higher education as a source of supplementary funding. As the environment continues to become more competitive for outside resources, institutions of higher education can benefit from more substantive and objective research on private voluntary support to better meet their growing needs for additional resources. Effective financial management requires a greater understanding of the expected size of financial contributions to assist with strategic planning and managing expenditure demands. This is especially true during periods of broad economic downturn when many institutions' revenue sources simultaneously suffer economic shocks through reduced endowment earnings; reductions in state appropriations; and external pressures by students, parents, and other stakeholders to keep tuition rates low. The same economic pressures that affect institutional revenue sources also affect the receipt of charitable contributions. Thus, the relationship between charitable donations and the economy is central to understanding whether these contributions help to stabilize the volatility of institutional revenues. This study examined private giving data reported to the Council for Aid to Education's annual Voluntary Support of Education survey from 1987 to 2012. Only gifts contributed by alumni, foundations, corporations, other individuals, and parents to public and private baccalaureate, master's, and doctoral institutions were considered. Giving data were adjusted through the Consumer Price Index, standardized by enrollment, and correlated with three economic indicators: Average Duration of Unemployment, Employees on Nonagricultural Payrolls, and the Standard & Poor's 500 Stock Price Index. The statistical analysis selected to examine each of the four research questions was multiple linear regression used to discover to what relationships exist between economic indicators and private giving to higher education by institutional type, institutional classification, and giving source. This study revealed that differences in private giving exist when correlated to economic indicators. Based on these results, it appears that charitable funding directed to support higher education institutions are based to some extent on resource providers' ability to expend support at particular times in the economic environment. As observed throughout all four research questions, the Average Duration of Unemployment indicator had a larger impact on charitable giving to higher education than did the Standard & Poor's 500 Stock Price Index indicator. The results of the Fisher's r to z transformations indicated that the regression model for alumni giving to public higher education institutions was determined to be the statistically strongest prediction model, followed by the regression model for foundation giving to public institutions. While fundraising continues to be only one source of additional funding, it cannot be ignored that the generosity of private donors since the earliest days of this country has helped to create, support and sustain the vital functions of colleges and universities. While the pursuit of private support may have been left primarily to the private institutions over the years, more recent developments in state and government funding patterns to higher education make the constant search for additional support sources a reality for today's public higher education institutions as well. Academic leadership must be cognizant that fiscal flexibility in times of economic prosperity as well as in times of economic downturns can be supplemented by the philanthropic intent of those interested in not only an institution's presence or prestige but also by its impact on students, families, communities, customers, and the economy. Institutions of higher education and their institutional advancement programs can greatly benefit from research studies that provide additional substantive and objective research.