Child-Cycle of Alumni Donations
This paper uses a unique data set to
donors’ contributions to a nonprofit institution are affected
the perception that the institution might confer a reciprocal benefit.
We study alumni contributions to an anonymous research university.
Inter alia, the data include information on the ages of the
alumni’s children, whether they applied for admission to the
university, and if so, whether they were accepted. The premise of our
analysis is simple: If alumni believe that donations will increase the
likelihood of admission for their children and if this belief helps
motivate their giving, then the pattern of giving should vary
systematically with the ages of their children, whether the children
ultimately apply to university, and the outcome of the admissions
process. We refer to this pattern as the child-cycle of alumni giving.
If the child-cycle is operative, one
that, ceteris paribus, the presence of children increases the
propensity to give, that giving drops off after the admissions decision
is made, and that the decline is greater when the child is rejected by
the university. Further, under the joint hypothesis that alumni can
reasonably predict the likelihood that their children will someday
apply to the university and that reciprocity in the form of a higher
probability of admission is expected, we expect that alumni with
children in their early teens who eventually apply will give more than
alumni whose teenagers do not.
The evidence is strongly consistent with
child-cycle pattern. Thus, while altruism drives some giving, the hope
for a reciprocal benefit plays a role as well. Using our results, we
compute rough estimates of the proportion of giving due to selfish