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.


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.


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.


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?


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...


What about the possibility that once a kid starts college, the parent will be making college payments for his child, in addition to his probable own loan payments.


I realize you blog from the east coast where silly west coast schools aren't very important, but you still might want to correct the spelling of "Standford".

Unless the paper really does come from Standford, in which case feel free to ignore this comment.


I am shocked that the rich are buying their kids admission into college. Absolutely shocked! This article will probably win a pulitzer in investigative journalism.

...or I could go with this,

This is the biggest waste of guvment funded academic research ever to cross the labs of Princeton since that fiasco Cold Fusion. Showing once again that economics researchers have nothing to do other than prove the obvious to a bunch of half-witted nitwits on America's blogs.


Did the study control for income level? Over time (and as one's children become closer to college age), one's discretionary income also increases. This could account for the causation as well.


For the longest time economicst made the mistake of only studying man as rational-self-interested man. Much recent research into altruism is making the opposite mistake of thinking people can or will be purely altruistic. This is in no small pert due to the fact that such research does not recognize the difference between "hard" and "soft" altriusm. Ants and bees and other social insects practive "hard" altruism, where actions are completely selfless. But social mammals practice "soft" altruism, which has a combination of family/tribal self-sacrifice tied in with self-interested behavior (not always rational, btw). When it comes to university giving, the alumni see the university as part of their tribe -- which in a real sense, it is. Thus it makes sense to support it. One expects one's tribe to accept both you and your family as part of that tribe, so when a university fails to accept your child, you take it as a slight against you from your tribe, and withdraw support from it. Since they have cut off support for you (in not accepting your child), then it makes sense that you cut off support for them. They, after all, were the ones to make the first move. Of course, all of this is going on at a very deep level, only to be rationalized later (as recent the recent work by Marc Hauser on the biological sources of ethics demonstrates).



Regarding the little picture...since when did Princeton magically transport Dartmouth's main hall to it's campus?


"a true altruistic act is (sic) anonymous"- says who? (jsisson)- I beg to differ- true altruism is what binds us communally- when we help each other out, it should be celebrated, engendering even more altruism- altruism done in a closet is a truncated social act


I think the picture is because Dartmouth was the "unnamed university" in the study. Or else it's an error.


Why not alter the scenario a little bit to provide for a larger demographic. Take for example a charity auction where the highest bidder receives an exclusive tour of an NFL team's facility, season tickets to all the teams games, and an autographed football (just for kicks). A prize like this would appeal to most if not all sports lovers irregardless of their social demographic (rich, middle class, and poor). How altruistic is a bidder truly being when the prize is so highly sought after? Is it possible to consider the donation as an altruistic act anymore?


Comments to a couple of you:

The charitable person in the case you mention isn't the bidder, but the donor of the prize. The NFL team could have simply auctioned the items off for itself and pocketed the money, but it chose to let a charitable organization keep the money instead. That's who the donor is in the scenario.

I doubt you'll find any animal that practice any sort of altruism, let alone "truly selfless" hard altruism. Worker ants and bees don't act selflessly at all, they act the way they do because it's in their best interest to do so. Because of their particular genetic makeup, in which they are more similar to their sisters than their daughters, workers ants and bees have a better chance of passing on their genes if they simply do the dirty work and let the queen have babies. The queen in either case is essentially passing on their genes for them. [I recommend "The Selfish Gene" for details.] In any case, no animal acts selflessly.
As for man, it all depends on how you define what we get in return. If you give money to a poor person simply because they are poor, you do it to satisfy a sense of duty, a moral obligation, a personal value or code of ethics, or just to make yourself feel or look better. If you define utility broadly, then whatever we get in return as far as feeling better surely counts, and there is no pure altruism. If you define utility narrowly, then the warm fuzzy feeling you get from donating to a good cause shouldn't count, and you can refer to such acts as purely selfless. [You'll obviously run into a problem at the margin: if you donate and receive a plaque or if your name is published as a donor, are you compensated by the publicity?]
In the end, people feel good for doing certain things, and they should. What we call it in the end really, truly doesn't matter.




I see your what you are saying but, if no one bids on the teams items, then by your logic, no donation has been made to the charity. Or at least a less than anticipated amount may be donated. Though, that argument was a fairly extreme case, my point is that the true donation is done by the bidder, and the team is more of a middle man that is matching the donation to the charity with a gift for the highest bidder.

Also, going back to the case of the school, assuming that there is a strong correlation between the alumni's donation and the university accepting the alumni's children to the university, then isn't the university the donor and benefactor?

I read the article as stating that there is a belief among some alumni where if a large enough donation is made (possibly a hard figure, I don't know) to the university, the alumni may "win" acceptance to the university for their children. Please correct me if I'm mistaken in my logic or interpretation?



In the first example, I think once the business makes its donation to the charity, a donation has been made; it is then up to the charity to convert the donation to something it can use. Many charities accept donated old cars, which they resell. The donation is hardly the purchase price of the car, but the car itself. It is hardly different from a charity accepting used clothes, which they can pass directly to recipients or resell and then use the money to buy something for recipients. Either way, the donation is the initial item given to the charity.

Regarding the schools: I don't think the school ends up as the donor and the benefactor, although I can see how one could see it that way. Assuming that a school can fill all its spots with qualified students, if a school accepts a large donation to accept a non-qualifed student, it is essentially trading lower overall academic performance for money. The price it gains from this transaction is the donation, since both students would have paid tuition and costs.
The difficulty in comparing this to the above example is that the school is a non-profit institution [a charity] with a mission. In a sense, its assets are the admission spots, and it may put some of them to use toward its mission [admit qualified students] and others toward raising money ["sell" them to alumni kids] with an eye towards using the money for its mission [presumably education].
To continue my wonderful analogies: imagine a charity with an initial endowment of 100 items of clothing for the poor. It gives 99 items to those who need them and sells 1 to a collector of used clothing for a reasonably high price. It invests that money, and after a while it can buy 200 more items for the poor.
Analogously, a university begins with an initial endowment of enough funding for 100 student spots. It uses 99 of those for the best qualified applicants, and admits a non-qualifying legacy applicant in exchange for a large donation. It then invests this donation and buys better facilities, better teachers, and more student spots.
In both cases, the entity uses its assets to further its mission, as distasteful as we might find some of the steps. A charity keeping clothes away from the poor? A university selling off admission? They are only distasteful until we realize that the long term benefit of those steps probably exceeds their short term cost in some, if not most cases.
[Don't think that I trust universities to actually use donations for proper purposes. For a discussion of the misdeeds of college administrators, I recommend ].




Thank you. Your post was very enlightening. I see that it is important to realize that the charity receives the assets prior to any bidding beginning and would run the auction themselves. It was my understanding (as was probably obvious) that the team retained the assets and ran the auction and then donated the profits to the charity.


In theory it doesn't matter in which order the events occur. It makes little difference to the charity if they receive the money or the goods they turn into money. [Unstated assumptions: the costs of running the auction are the same for both the team or the charity; the charity always receives the selling price minus costs; bidders would not bid more in either setting, that is, the final price is independent from the host of the auction.]
In practice, it probably matters big time in which order the events occur. One, the entities may have different event costs: it may be far cheaper to set up a giant auction with many donations being sold, while the team [and other potential donors] would each have to host their own auction prior to donating. Second, I'm no tax law expert, but I'd be willing to bet that the tax code treats these things differently, and since the team would probably want to maximize its benefit under the tax code, whatever order the tax code prescribes is what would happen in practice.



to hhadzimu: I'm using the definitions of "hard" and "soft" altruism as they are used in ethology and sociobiology. Yes, all altruism is essentially "selfish" in the sense that you are sacrificing your self for a group of relatives, and thus are actually selfishly protecting your own genome. Social insects are seen as hard because the sacrifice is absolute -- and it is absolute because they are not genetically reproducing anyway. There is no "self" to be "selfish" about -- they are in many ways just a disposable extention of the queen. Humans and all other social mammals use "soft" altruism -- only humans consider more than those who share their genes as members of their tribe, but may also include people who share the same beliefs or ideology -- thus it makes sense to kill yourself if the ideology will survive your death because of it. This makes human altruism appear to be more "hard," but it's not.

Also, don't use a definition of altruism that by defnition nothing can live up to, because then you are simply setting up a straw man. These are the uses and definitions of the word "altruism" that are currently in use by those who study it.



@ 12/10 - I was wondering that, too!

Personally, I doubt Dartmouth was the "unnamed university" - it just seems like a bad choice: although I know more than 50 percent of the alumni give, a few years ago it was ranked as one of the highest universities for alumni giving, which wouldn't make it representative, and more than 70 percent of the class of 2006 donated, which wouldn't exactly correspond with what the study is possibly trying to prove. (I'm assuming one doesn't have kids a year after graduation)

The private school stat matches...
But only about 7% of admitted students this year were legacies, which seems an awfully small group to study.

Overall, it seems an awfully small study - why not compile data from 20-30 schools?
Money, I suppose