The effect of changes in state appropriations on voluntary giving to state supported universities

Abstract

This study examines the relationship between levels of state appropriations and voluntary support at public colleges and universities. It first describes levels of state appropriations and voluntary support at public institutions for the period of 1993-2001. Changes over time and differences across institution types are highlighted. Additional analyses breaks down the figures into the sources (alumni, other individuals, corporations, and foundations) and the form (restricted or unrestricted) of voluntary support. Using ordinary least squares regression (OLS) and fixed effects regression techniques, this study then investigates how changes in state appropriations are related to private philanthropic giving to state supported institutions of higher education. This study uncovers the changes in form, source, and magnitude of voluntary support to public higher education resulting from changes in state appropriations. The study also examines whether these relationships differ by institutional competitiveness or Carnegie classification. The results of this study have important implications for higher education policymakers, practitioners, and researchers. Most important, the results suggest that donations to public universities are positively related to changes in state appropriations. That is, donors seem to be willing to support public universities if state appropriations increase; however, donors do not seem to be willing to replace reductions in state appropriations. Additionally, the results of this study reveal that disparities in voluntary support to public universities are a function of institutional complexity and prestige. Finally, the results of this study provide evidence that donations to public universities are typically restricted in nature. Consequently, the results herein provide no evidence that suggests that increases in voluntary support to public universities are replacing state appropriations or that public universities are "privatizing."