TY  - JOUR
AU  - Brown,Jeffrey R.
AU  - Dimmock,Stephen G.
AU  - Weisbenner,Scott
TI  - The Supply of and Demand for Charitable Donations to Higher Education
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18389
PY  - 2012
Y2  - September 2012
UR  - http://www.nber.org/papers/w18389
L1  - http://www.nber.org/papers/w18389.pdf
N1  - Author contact info:
Jeffrey R. Brown
Department of Finance
University of Illinois at Urbana-Champaign
515 East Gregory Drive
Champaign, IL 61820
Tel: 217/333-3322
E-Mail: brownjr@illinois.edu

Stephen G. Dimmock
Division of Finance and Banking
Nanyang Technological University
Singapore, 639798
Tel: 65 6790-6119
E-Mail: dimmock@ntu.edu.sg

Scott Weisbenner
University of Illinois at Urbana-Champaign
Department of Finance
340 Wohlers Hall, MC-706
1206 South Sixth Street
Champaign, IL  61820
Tel: 217/333-0872
Fax: 217/244-9867
E-Mail: weisbenn@illinois.edu
M1  - published as Jeffrey R. Brown, Stephen G. Dimmock, Scott Weisbenner. "The Supply of and Demand for Charitable Donations to Higher Education," in Jeffrey Brown and Caroline M. Hoxby, editors, "How the Financial Crisis and Great Recession Affected Higher Education" University of Chicago Press (2013)

M2  - featured in NBER digest on 2013-02-01
AB  - 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.
ER  -