The False Altruism of Alumni Giving

Can a charitable act truly be called charitable when the contributor wants or expects a reward?

In a new study, Princeton economics professor Harvey Rosen and Stanford graduate student Jonathan Meer examined this question using a specific case of incentivized charity: alumni donations. They found that the size and frequency of an alumnus’s contributions to his alma mater rise in direct correlation with his child’s age and likelihood of applying to the school. The data consisted of more than 32,488 donations given between 1983 and 2006 to an unnamed university, as well as information on the age and admissions status of each donor’s children.

The numbers indicate that, after his child is born, an alumnus’s chances of making a donation rises 13%, and continues to increase as the child ages, reaching 17% when the child turns thirteen. For those with children ages 14-17, the probability of giving increases if the teen ultimately applies. After age 17, giving by alumni whose children were admitted goes up a whopping 34%, while those whose kids don’t make the cut cease giving almost entirely. Whether the giving actually affects a child’s admissions chances remains unstudied; for Rosen and Meer’s purposes, “the child-cycle of alumni giving requires only the perception of reciprocity.”

The choice of school (and its admissions exclusivity) may have had a heavy influence on the data. As noted in a Slate article by the economist Joel Waldfogel (whose “Deadweight Loss of Christmas” paper Levitt and Dubner discussed in a New York Times Magazine article), the university “looks like a pretty elite place,” in that “[m]ore than 40 percent of the students attended private schools before college, and 40 percent attain an advanced degree afterward.” As further indication that the school is among the more prestigious: the “fields of education, finance, health care, and law are highly represented” in alumni careers. More than half of alumni (56 percent) donate in any given year. Their average gift is $466, with distribution heavily skewed by large gifts.”

While the results provide some insight into the reasoning behind charity, it’s hard to believe that the donating patterns of likely upper-middle class parents (particularly those facing a recent and much-hyped college admissions crunch) can really “shed light on the general issue of altruism,” as the authors claim. Though the findings do put a new spin on Steve Landsburg‘s theories on charitable giving.

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  1. debbart says:

    Did they also factor in that graduates’ student loans tend to go on for about 20 years, which would probably coincide with the time their kids would be heading for college? I’m sure getting their children into their alma mater is a factor, but there may be other significant economic factors to which the donations may be attributed.

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  2. debbart says:

    Did they also factor in that graduates’ student loans tend to go on for about 20 years, which would probably coincide with the time their kids would be heading for college? I’m sure getting their children into their alma mater is a factor, but there may be other significant economic factors to which the donations may be attributed.

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  3. aardvarkious says:

    This does not necessarily imply a lack of altruism. People may not be donating to assure their child’s admission.

    As children age and begin thinking about applying for that school, surely the parent’s thoughts turn more toward (undoubtedly with many good memories), which in itself would make them more likely to contribute. Furthermore, as they see their child prepare for their education and the parent realizes how important this is, they may have the altruistic desire to make the whole experience superior for the entire next generation, not just their child, and to do so it is only natural to donate where one is an alumni.

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  4. aardvarkious says:

    This does not necessarily imply a lack of altruism. People may not be donating to assure their child’s admission.

    As children age and begin thinking about applying for that school, surely the parent’s thoughts turn more toward (undoubtedly with many good memories), which in itself would make them more likely to contribute. Furthermore, as they see their child prepare for their education and the parent realizes how important this is, they may have the altruistic desire to make the whole experience superior for the entire next generation, not just their child, and to do so it is only natural to donate where one is an alumni.

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  5. jsisson says:

    I have wondered about this for any kind of “altruism”. If someone gives a donation, but expects some kind of recognition, then they’re essentially buying the recognition. If it’s an organization providing the donation, then it will probably come out of a marketing budget, right?

    A true altruistic act, one that is all about providing value to a deserving party, could be anonymous. How often would anyone donate anything if they did not expect to receive recognition for it?

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  6. jsisson says:

    I have wondered about this for any kind of “altruism”. If someone gives a donation, but expects some kind of recognition, then they’re essentially buying the recognition. If it’s an organization providing the donation, then it will probably come out of a marketing budget, right?

    A true altruistic act, one that is all about providing value to a deserving party, could be anonymous. How often would anyone donate anything if they did not expect to receive recognition for it?

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  7. hyrumberg says:

    I agree with the first comment. I will be paying for my graduate tuition student loans for 20 more years! I just got a request in the mail yesterday from my school asking for donations. I think it will be a lot easier to donate after the loans are paid off…

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  8. hyrumberg says:

    I agree with the first comment. I will be paying for my graduate tuition student loans for 20 more years! I just got a request in the mail yesterday from my school asking for donations. I think it will be a lot easier to donate after the loans are paid off…

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