Abstract

http://ssrn.com/abstract=2147099
 
 

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The Supply of and Demand for Charitable Donations to Higher Education


Jeffrey R. Brown


University of Illinois at Urbana-Champaign - Department of Finance; National Bureau of Economic Research (NBER); University of Illinois College of Law; University of Illinois at Urbana-Champaign - Institute of Government and Public Affairs (IGPA); University of Illinois at Urbana-Champaign - Department of Economics

Stephen G. Dimmock


Nanyang Technological University - Division of Finance

Scott J. Weisbenner


University of Illinois at Urbana-Champaign - Department of Finance; National Bureau of Economic Research (NBER)

September 2012

NBER Working Paper No. w18389

Abstract:     
Charitable donations are an important revenue source for many institutions of higher education. We explore how donations respond to economic and financial market shocks, accounting for both supply and demand channels through which these shocks operate. In panel data with fixed effects to control for unobservable differences across universities, we find that overall donations to higher education – and especially capital donations for university endowments or for buildings– are positively and significantly correlated with the average income and house values in the state where the university is located (supply effects). We also find that when a university suffers a negative endowment shock that is large relative to its operating budget, donations increase (demand effects). This is especially true for donations earmarked for current use. We conclude by discussing the importance of understanding how donations respond to economic shocks for effective financial risk management by colleges and universities.

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Number of Pages in PDF File: 32

working papers series


Date posted: September 15, 2012  

Suggested Citation

Brown, Jeffrey R. and Dimmock, Stephen G. and Weisbenner, Scott J., The Supply of and Demand for Charitable Donations to Higher Education (September 2012). NBER Working Paper No. w18389. Available at SSRN: http://ssrn.com/abstract=2147099

Contact Information

Jeffrey R. Brown (Contact Author)
University of Illinois at Urbana-Champaign - Department of Finance ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
University of Illinois College of Law ( email )
504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
University of Illinois at Urbana-Champaign - Institute of Government and Public Affairs (IGPA) ( email )
Urbana, IL 61801
United States
University of Illinois at Urbana-Champaign - Department of Economics ( email )
410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States
Stephen G. Dimmock
Nanyang Technological University - Division of Finance ( email )
S3-B1B-76 Nanyang Avenue
Singapore, 639798
Singapore
Scott J. Weisbenner
University of Illinois at Urbana-Champaign - Department of Finance ( email )
340 Wohlers Hall, MC-706
1206 S. Sixth Street
Champaign, IL 61820
United States
217-333-0872 (Phone)
217-244-9867 (Fax)
HOME PAGE: http://business.illinois.edu/weisbenn/
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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