Philanthropy plays an important but complex role in higher education in the United States. While private donations to universities can increase access and resources, they may also exacerbate inequality between institutions and students. Mega-gifts from wealthy donors tend to benefit elite private universities with large endowments the most, widening gaps compared to less selective public schools. There is debate around whether philanthropy aims to reduce inequality through opportunities like scholarships, or reinforce it by further concentrating resources at already wealthy institutions attended by socioeconomically advantaged students. The impact likely depends on how and where donations are targeted.
Can Philanthropy and Fundrasing Fix our Inequality?: Exploring Philanthropy's Impact on U.S. Higher Education
1. Can Philanthropy and Fundraising Fix our
Inequality?: Exploring Philanthropy’s
Impact on U.S. Higher Education
Roy Y. Chan
Ph.D. candidate (Education Policy Studies), School of Education, Indiana University, Bloomington
Ph.D. minor (Philanthropic Studies), Lilly Family School of Philanthropy, Indiana University-Purdue
University Indianapolis (IUPUI)
rychan@indiana.edu
Association for the Study of Higher Education (ASHE) 40th Annual Conference
November 6, 2015
Chan, R. Y. (2015). Can Philanthropy and Fundraising Fix Our Inequality?: Exploring Philanthropy’s Impact on U.S. Higher Education. Scholarly
paper presented at the Association for the Study of Higher Education (ASHE) 40th Annual Conference, Denver, CO.
2. Overview
• Overview of Philanthropy and Fundraising in
American Higher Education
• Statement of Research Interests
• Literature Review
– Defining Higher Education Philanthropy
– Inequality and Higher Education Philanthropy
– Issues with Philanthropy in Higher Education
• Preliminary Findings
• Next Steps
• Open-Ended Discussion Questions
• Q&A
3. POLL
In 2014, where do you think private donors gave the most to?
• A) Education (primary, secondary, and higher
education)
• B) Foundations (e.g., Andrew Carnegie Corporation,
Bill & Melinda Gates Foundation, Lumina
Foundation, Rockefeller Foundation)
• C) Health (e.g., hospitals, healthcare)
• D) Religion (e.g., church, religiously-affiliated
organizations)
• E) Human Services/NGO’s (e.g., American Red
Cross, Save the Children, Amnesty International)
4. Overview of Philanthropy and Fundraising
Where do most people give to? = RELIGION
Religion
$114 Billion
Education
$54 Billion
Human Services
$42 Billion
Foundations
$41 Billion
Health
$30 Billion
TOTAL = $358 Billion
Source: Giving USA, 2015
5. Overview of Philanthropy and Fundraising
Who mostly gives to non-profit? = INDIVIDUALS
Individuals
$258 Billion
Foundations
$53 Billion
Bequests
$28 Billion
Corporations
$17 Billion
Source: Giving USA, 2015
6. Overview of Philanthropy and Fundraising
Individual contribution is second highest since 2007
Source: Giving USA, 2015
7. Landscape of Advancement in Higher Education
Who gives to colleges and universities? =
FOUNDATIONS and ALUMNI (56%)
Source: VSE/CAE, 2015
8. Landscape of Advancement in Higher Education
Where are wealthy donors giving to the most? =
EDUCATION
9. Landscape of Advancement in Higher Education
Why do people give to higher education?
Source: Eduventures, 2014
10. Landscape of Philanthropy in Higher Education
What is the average age of giving =
Age 45-65
Source: Giving USA 2014
11. Statement of Research Interests
• 1) How have philanthropy and
fundraising shape U.S. higher education?
• 2) What is the relationship between
inequality and higher education
philanthropy?
• 3) In what ways do “mega-size” gifts seek
to reinforce or exacerbate inequality in
American higher education?
13. Literature Review
Defining Philanthropy
• Philanthropy – “the love of humanity” (Curti, 1958); giving
money/time to help make life better for the public good (Payton,
1988)
• Traditional Higher Education Philanthropy – giving money to
universities (Drezner, 2011)
– Institutional Advancement – advancement services,
communication and public relations, alumni and parent
relations, and development (Proper & Caboni, 2014)
• New Philanthropy (or Philanthrocapitalism /Mega Philanthropy) –
using extraordinary amounts of private money to fund efforts such
as research centers, professorships, endowed chairs, research
projects, etc.
– Ex: The Giving Pledge (2015) – 137 billionaires have pledged to
15. Literature Review
Inequality and Higher Education Philanthropy
• “A major critique of philanthropy is that it can perpetuate
social inequality” (Drezner, 2011, p. 81).
– Philanthropic scholars have debated whether this
outcome is either purposeful or accidental (Anderson,
1988; Curti & Nash, 1965; Lewis, 1994; Watkins, 2001)
• “There remain significant inequalities in terms of which
institutions receive support” (Bernstein, 2013, p. 80)
• Arnove (1980) warned that philanthropy may reproduce
class structures because wealthy donors/organizations
have the corporate power to effect what merits society’s
attention.
17. Literature Review
Inequality and Higher
Education Philanthropy
• 40 richest holds almost
2/3 of the total wealth
($6.3 billion)
• 10 richest universities in
America hold nearly 1/3
of the total out of top 500
public and private
institutions (Moody
Investors Service, 2015)
18. Inequality and Higher Education Philanthropy
“We are spending the most money as a society educating the wealthiest people. The people who
need help the most are the most disadvantaged. They end up going to the universities that spend
the smallest amount per student.”
– Dr. Ronald Ehrenberg, director of the Cornell University Higher Education Research Institute
19. Literature Review
Issues with Philanthropy in Higher Education
• “Donations directed at providing services to our
fellow citizens are morally problematic” (Levy, 2006,
p. 163)
– Resources from government vs. individual/foundation
• Philanthropy can lead to cultural imperialism (i.e.,
elite individuals/groups have the right to determine
policies in societies) (Arnove, 1980).
– For example, Bill and Melinda Gates Foundation use gifts to set education
policy at all levels (Ravitch, 2010)
• Foundations use their philanthropy to push their
mission and their opinions (Karoff, 2004).
25. “Mega-Size” Gifts to U.S. Higher Education ($50+
million): Elite vs. Non-Elite Universities, 2014-2015
*Total “mega-size” gift combined at elite universities is THREE times larger
than non-elite universities during the 2014-2015 year
26. Endowment Level of “Mega-Size” Gifts between
Private and Public Universities, 2014-2015
• There has been 39 mega-
size $50+ million gifts
from high-profile donors
during 2014-2015.
• 16 private and 12 public
universities obtained
$50+ million, 2014-2015
• 6 of 21 are public
institutions are ABOVE
$1.0 billion endowment
• 6 of the 7 are public
institutions are BELOW
$1.0 billion endowment
**More billionaire
donors are giving to elite
private institutions who
hold $1.0+ billion
endowment than non-
elite institutions with
less than $1.0 billion
endowment in the
United States**
27. Issue #1: Inequality in Endowment Levels
• Private colleges and universities hold two/three
times more endowment value than public colleges
and universities (NACUBO, 2014)
28. Higher Education Philanthropy and Inequality
Where do most private donors give to? =
Mostly top 100 universities
Source: Eduventures, 2014
29. Issue #1: Inequality in Endowment Levels
Top 10 Richest Universities, 2014-2015
Private
• Harvard University (42.8 billion)
• Stanford ($31.6 billion)
• Princeton University ($21.3
billion)
• MIT ($15.2 billion)
• University of Pennsylvania ($11.9
billion)
• Duke University ($11.4 billion
• Northwestern University ($10.4
billion)
• Columbia University ($9.9 billion)
• University of Notre Dame ($9.5
billion)
TOTAL = $164 billion
Public
• University of Texas system ($36.7
billion)
• University of California ($28.6 billion)
• University of Michigan ($11.5 billion)
• State University System of Florida ($9.7
billion)
• University of Virginia ($8.1 billion)
• Pennsylvania State University ($6.7
billion)
• California State University ($5.7 billion)
• Texas A&M University system ($5.0
billion)
• University of Washington $4.9 billion)
• Ohio State University ($4.8 billion)
TOTAL = $121 billion
Source: Moody Investors Service, 2015
30. Issue #2: Inequality in College Attendance
• Top 50 universities who hold 2/3 of the wealth
enroll smaller number of low-income and minority
students than bottom 50 universities
31. Issue #3: Inequality in College Graduation Rates
• The top 50 most selective universities graduate
higher percentage of low-income minority students
than the bottom 50 least selective universities.
32. Preliminary Findings
Can philanthropy and fundraising reduce our inequality in
higher education? = DEPENDS ON WHO YOU ASK!
YES
• Encourages colleges and
universities to reduce tuition
costs and fees as well as student
debt
• Reduces wealth, race, ethnicity,
gender, and income inequality
groups in higher education
• Expands access to technology and
the performing/visual arts
• Creates new opportunity through
knowledge creation and
knowledge transfer
• Fosters social mobility for more
students to attend and complete
higher education (scholarships)
• Promotes “systemic
change”(reforming higher
education laws and policies)
NO
• Widens the number of “mega-size”
gifts donated between elite and non-
elite institutions
• Widens wealth gap between rich and
poor colleges (endowment gains, land
holdings, endowment per student)
• Widens college attendance and
graduation rates between wealthy
and poor students
• Widens college resources (better
facilities, student services) received
between public and private
universities
• Widens alumni giving participation
(wealthy graduates from elite
institutions are more likely to give
back to their alma mater)
33. Open-Ended Discussion Questions
• 1) Do you think philanthropy and fundraising
seek to reinforce or exacerbate inequality in
American higher education?
• 2) Should private donors continue to spend
the most money educating the wealthiest
people?
• 3) What are your views on John Paulson’s
$400 million gift to Harvard University’s
School of Engineering and Applied Sciences?
34. Questions? Comments?
Roy Y. Chan
School of Education
Lilly Family School of Philanthropy
Indiana University
rychan@indiana.edu
scholar.harvard.edu/roychan