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Can Philanthropy and Fundraising Fix our Inequality?: Exploring Philanthropy’s
Impact on U.S. Higher Education
Roy Y. ChanPh.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 ConferenceNovember 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.
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
POLLIn 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)
Overview of Philanthropy and FundraisingWhere 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
Overview of Philanthropy and FundraisingWho mostly gives to non-profit? = INDIVIDUALS
Individuals
$258 Billion
Foundations
$53 Billion
Bequests
$28 Billion
Corporations
$17 Billion
Source: Giving USA, 2015
Overview of Philanthropy and FundraisingIndividual contribution is second highest since 2007
Source: Giving USA, 2015
Landscape of Advancement in Higher EducationWho gives to colleges and universities? =
FOUNDATIONS and ALUMNI (56%)
Source: VSE/CAE, 2015
Landscape of Advancement in Higher EducationWhere are wealthy donors giving to the most? =
EDUCATION
Landscape of Advancement in Higher Education
Why do people give to higher education?
Source: Eduventures, 2014
Landscape of Philanthropy in Higher Education
What is the average age of giving = Age 45-65
Source: Giving USA 2014
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?
How did this project get started?
Literature ReviewDefining 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 give half of their fortunes to charity
Philanthrocapitalism to Fix Inequality
Literature ReviewInequality 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.
Example of Inequality in Higher Education Philanthropy
Literature ReviewInequality 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)
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
Literature ReviewIssues 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).
Issues with Higher Education Philanthropy
Issues with Higher Education Philanthropy
http://www.hamiltonproject.org/papers/increasing_education_what_it_will_and_will_not_do_for_earnings_inequal/
Issues with Education Philanthropy and Inequality
So the question arises: how do “mega-gifts” reduce or
reinforce inequality in higher education?
Number of “Mega-Size” gifts has Increased
Source: Eduventures, 2014
“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
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**
Issue #1: Inequality in Endowment Levels
• Private colleges and universities hold two/three times more endowment value than public colleges and universities (NACUBO, 2014)
Higher Education Philanthropy and Inequality
Where do most private donors give to? = Mostly top 100 universities
Source: Eduventures, 2014
Issue #1: Inequality in Endowment LevelsTop 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
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
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.
Preliminary FindingsCan 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)
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?
Questions? Comments?
Roy Y. Chan
School of Education
Lilly Family School of Philanthropy
Indiana University
rychan@indiana.edu
scholar.harvard.edu/roychan
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