Charitable Giving of Alumni: Micro-Data Evidence from a Large Public University

By Okunade, Albert Ade.; Wunnava, Phanindra V. et al. | The American Journal of Economics and Sociology, January 1994 | Go to article overview

Charitable Giving of Alumni: Micro-Data Evidence from a Large Public University


Okunade, Albert Ade., Wunnava, Phanindra V., Walsh, Raymond, Jr., The American Journal of Economics and Sociology


I

Introduction

BECAUSE OF RECENT SHORTFALLS in funds for higher educational institutions at all government levels (U.S. Congress, Senate, Committee on the Budget, 1987), determining the factors which influence alumni gifts to higher education becomes more important. Currently, public financing of higher education continues to worsen nationwide.(1) Academic institutions must tap into their alumni's wealth to maintain or increase funds for academic programs. While external corporate donors may be more motivated to support higher education when alumni contributions to the alma mater are high, this research examines only alumni personal charitable donations.

In a life-cycle model of charitable contributions, individual donations are viewed as recurrent consumption outlays for nondurable goods and services (Meyer, 1980, 217) and are expected to increase with the donor's age. Charitable donations also tend to increase with donor incomes (or earnings) and marginal income tax rates (Kitchen and Dalton, 1990). These determinants usually increase over the donor's working life. Accurate information on donors' incomes are rarely available, however.

Due to data limitations, past researchers (Grant and Lindauer, 1986; Olsen, Smith, and Wunnava, 1989) proxied income with age to approximate the lifecycle of alumni giving. However, because an individual's income elasticity for charity may differ from his or her elasticity of charitable giving with respect to age, the life-cycle profile of alumni donation may not coincide with the age-income profile of the donor. Consequently, this study departs from past practice by focusing instead on the age-giving profile of alumni donors. The modeling framework adopted here allows the determination of the time period within which the growth rate of alumni gifts is expected to remain positive and whether or not this follows donors' age-income profiles. Consequently, the study results can be useful for projecting alumni donations and for identifying the gift-enhancing attributes of the alumni. Moreover, unlike past research, this study is unique in that individual-specific micro-panel data (i.e., following given cross-sections of donors over time) of a large public university are used. Consequently, the effects on giving of a donor's gender, college of major, graduation with (or without) honors, graduate education (and where obtained), involvements in campus Greek clubs and other non-Greek organizations, etc., are evaluated here. How the business cycle and a 1962 Federal Court Order to desegregate the university racially affected alumni donations are also evaluated.

II

Review of Related Literature

SEVERAL THEORETICAL FRAMEWORKS exist for modeling charitable donations. There is the economics of charity approach based on the theory of consumer demand for a nondurable good or service. This approach focuses on the price and income effects of voluntary charitable donations (Feldstein and Taylor, 1976) and also enables researchers to evaluate how changes in the tax policy affect the level of charitable contributions (Hood, Martin, and Osberg, 1977; Feldstein, 1975; Glenday, Gupta, and Pawlak, 1986; Kitchen and Dalton, 1990). A second approach rests on the contention that charity-giving individuals are driven by a sense of obligation to provide collective goods and services for the society through say, the United Way (Keating, 1981). In a third approach, charitable contributions are viewed as "payments" in exchange for intangible personal rewards of self-esteem or group membership (Keating, Pitts, and Appel, 1981; Zaleski and Zech, 1992). Finally, Becker's (1974) theory of social interactions posits interdependent utility functions for unrelated individuals as the motive for charitable giving.

These seemingly divergent rationales for voluntary personal charitable donations to non-profit entities are fully compatible with the utility maximization framework. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Charitable Giving of Alumni: Micro-Data Evidence from a Large Public University
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.