June 14, 2007

Alumni Donations Aren’t Just Altruism

Conventional wisdom has it that if an alumnus wants to help his kids’ chances of getting into the old alma mater, he should step up his contributions to the college for a few years before a child mails out an application.

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Parents and college admission experts debate whether the strategy is effective, but “Altruism and the Child-Cycle of Alumni Giving,” a study released this week by the National Bureau of Economic Research, uses data from one anonymous research university to confirm that it is a common practice among alumni whose children are getting ready to apply.

Analyzing alumni giving and admissions data collected between 1983 and 2006 at the university, referred to as Anon U throughout the study, two economists observed a close relationship between alumni giving and the age and college aspirations of their legacy children. The economists are Harvey S. Rosen, a professor at Princeton University, and Jonathan Meer, a graduate student at Stanford University.

Alumni, they found, are generally “selfish” when it comes time to write a check to their alma mater, taking into consideration the ages of their children and whether those children are considering applying.

The expectation that an alumnus’ donation can help get his child into his alma mater is one that workers in many development and alumni relations office discourage. Rae Goldsmith, vice president for communications at the Council for Advancement and Support of Education, said that “ethically, admissions must be separate from fund raising.”

Some universities, she said, have “declined to accept gifts” when there is the expectation that the gift will be rewarded with an acceptance letter. Real estate developer Charles Kushner famously gave $2.5 million to Harvard in 1998, the same year when his son Jared applied for admission. (Kushner was accepted.)

In their study, Rosen and Meer considered three facets of alumni giving at Anon U: the probability that an alumnus gave anything in a certain year, the amount given in that year and the probability that an alumnus is a “class leader” in that year, someone who donated the same amount or more than 90 percent of the members of his or her class.

They found that the probability and amount that alumni donated to Anon U when one of their children was between the ages of 14 and 17 did correlate with whether the child would apply. Just having a child increases the probability of giving by about 13 percent for Anon U alumni. Once children enter their teenage years, alumni whose children apply to Anon U give more than parents whose children do not.

The same patterns were present among class leaders, who are more likely to give and to give more when their children were planning to apply.

An alumnus whose 18 year-old child has been accepted to the university has a 34 percent greater probability of donating just after an admissions offer than an alumnus with an 18 year-old who does not apply or is rejected. Into the child’s mid-20s, the probability of giving is more than 20 percent greater for alumni whose children got into the university.

Goldsmith said there are “a lot of factors that encourage graduates to give” other than that their children are approaching college age.

She noted that “as graduates age, they become more likely to donate and to donate more” to their alma maters, regardless of whether they have children or if their children applied or considered applying to that college.

But, she added that alumni are more likely to give if they are “engaged” with the college and that additional engagements, such as having a child who is an undergraduate there, make it even more likely that an alumnus will give and give more than he has in the past.

Rosen said in an e-mail that the study’s statistical model “explicitly takes into account the fact that giving patterns vary with the age of the alumnus.” An alumnus’ age, he added, “cannot be the explanation for our result that donations depend on the age and admissions status of children.”

Rosen and his wife attended the University of Michigan and give to the university every year. But his daughter, 26, and son, 23, both graduated from Princeton.

— Jennifer Epstein

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