Institutional characteristics and environmental factors that influence private giving to public colleges and universities: a longitudinal analysis
Liu, Ying
:
2007-04-17
Abstract
INSTITUTIONAL CHARACTERISTICS AND ENVIRONMENTAL FACTORS THAT INFLUENCE PRIVATE GIVING TO PUBLIC COLLEGES AND UNIVERSITIES:
A LONGITUDINAL ANALYSIS
YING LIU
In recent years, increasing market competitiveness and rising educational costs have underscored the importance of external revenues in higher education finance. Even as the higher education costs continue to exceed the rate of inflation, public funding from both state and federal sources is steadily declining. As traditional funding sources become less reliable, colleges and universities seek to pursue alternative revenues such as private donations.
Using panel data of public colleges and universities from 1994-2003, this study investigated how institutional characteristics and environmental factors influence overall private giving and its varying sources to public colleges and universities. Hausman test was used to test two competing specifications --- fixed-effects model and random-effects model, and fixed effects model was identified as more appropriate to this study.
The results of the study verified that both institutional characteristics and environmental factors have some effects on private giving an institution receives. The following institutional characteristics were statistically significant: alumni/ae of record, expenditure per FTE, total revenue per FTE, endowment per FTE. The following environmental factors were statistically significant: state appropriation per FTE, state tax appropriation for higher education per $1000 of state personal income, state financial aid per student, citizen ideology, and gross state product per capita.
This study suggested a general conceptual framework to better understand forces that influence total private giving as well as private giving from different donor groups. Findings of this study have some practical implications to higher education policymakers and practitioners. Institutions at the top of the institutional hierarchy enjoy accumulative advantage in generating private giving. That is, donors are more willing to support institutions with higher quality, more endowment, and more state appropriations. Additionally, increase in state support to higher education does not displace private giving to public colleges and universities. Finally, environmental factors also play important roles in successful fund raising in public colleges and universities.