28 Pages Posted: 22 Jun 2001
Date Written: February 2001
In the late 1990's, the average university endowment has experienced extraordinary growth. This paper investigates the effects of this growth on donations. In particular, the paper focuses on whether or not donations by particular kinds of donors are "crowded out" by endowment growth. A simple model of donor behavior is developed which takes account of the multiple objectives of those donors, and concludes that different types of donors are more or less responsive to endowment growth. These models are then tested using data provided by the Council on Aid to Education on a wide range of colleges and universities. Cross sectional work on the 1999 data is supplemented by fixed-effects analysis using a panel from the early 1980's to 1997. The results suggest that in the very recent period there has been some crowding out and that this effect is most pronounced among particular categories of donors.
JEL Classification: L3
Suggested Citation: Suggested Citation
Oster, Sharon M., The Effect of University Endowment Growth on Giving: Is There Evidence of Crowding Out? (February 2001). Yale SOM Working Paper No. ES-10. Available at SSRN: https://ssrn.com/abstract=271597 or http://dx.doi.org/10.2139/ssrn.271597