Academic journal article Contemporary Economic Policy

Educational Contributions, Academic Quality, and Athletic Success

Academic journal article Contemporary Economic Policy

Educational Contributions, Academic Quality, and Athletic Success

Article excerpt

SHELBY GERKING [*]

This article examines the role of successful Division I football and basketball programs in motivating alumni and other donors to make charitable educational contributions to U.S. universities. Results from fixed effects analysis of panel data on 87 universities for the period 1986-87 to 1995-96 indicate that year-to-year changes in athletic success have a positive impact on levels of alumni giving, but that other types of donors are not as responsive. Also, long-standing athletic traditions established prior to the sample period appear to generate academic benefits in the form of increased charitable donations from all sources. However, the estimated impact of a successful athletic tradition is relatively weak when compared to the effect of student and faculty quality on educational contributions. (JEL 122, H49)

I. INTRODUCTION

To meet rising expenses, college and university presidents actively seek private contributions to support the educational mission of their institutions. An important strategic issue in this regard concerns the relative roles of successful athletic traditions and high-quality academic programs in encouraging charitable donations. To what extent is donor generosity influenced by the "warm glow" of victories in recent athletic contests or in strong athletic traditions maintained over many years? Does building top-rated academic programs pay off possibly because graduates earn larger incomes over their careers and acquire greater wealth to share with their mentors? If athletic success is indeed positively associated with educational contributions, which sport produces donations most efficiently? Of course, athletic and academic quality may both lead to greater education-related contributions. Nevertheless, both areas are costly to maintain, so it is of interest to know the amount by which contributions might ris e in response to improvements in each.

This article presents an empirical examination of links between athletics, academics, and educational contributions from two perspectives. First, a fixed effects model is applied to panel data on 87 universities from the 1986-87 academic year to the 1995-96 academic year. This analysis has similarities to previous studies of athletic success and educational contributions (e.g., Marts, 1934; Sigelman and Carter, 1979; Brooker and Klastorin, 1981; Sigelman and Bookheimer, 1983; Coughlin and Erekson, 1984; Grimes and Chressanthis, 1994; Baade and Sundberg, 1996), but has the advantage of offering better controls for heterogeneity between universities and over time. The main results of the analysis, which stand in contrast to those presented in some of the earlier work cited, is that year-to-year changes in athletic success have no effect on total educational contributions, but do appear to affect the component of total contributions coming from alumni. Second, a related empirical model is developed to explain t he large variation in average contributions received by each of the 87 universities over the 10-year period analyzed. This analysis extends work by McCormick and Tinsley (1987, 1990) and links mean educational contributions to both historical athletic success and institutional quality as measured by prominence of research programs and test scores of incoming freshman.

The remainder of this article is divided into four sections. Section II describes the data measuring voluntary contributions. Section III presents fixed effects estimates of the role of year-to-year changes in athletic success on contributions. Section IV analyzes university-specific variables, such as athletic tradition and academic quality, in determining mean contributions over the sample period. Section V concludes.

II. DATA ON VOLUNTARY CONTRIBUTIONS

Data for this study were collected from 87 universities that fielded both NCAA Division I football and basketball teams over the period 1986-87 to 1995-96. …

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