Document Type

Article

Publication Date

2013

Abstract

This study provides stochastic frontier analyses of private philanthropy in financing public universities in the United States. Panel data estimates of private giving –fundraising production frontiers and inefficiency effects are provided for an aggregate of 353 universities and separately for research intensive, doctoral granting, and master level institutions over the 2006-09 academic years. Inefficiency effects are modeled as set of university specific covariates, including medical schools, hospitals, executive employment and a time trend to capture potential effects of the global financial crisis on university fundraising efficiency. Efficiency scores are estimated across university levels and indicate that mean efficiencies range from 53% to 27% for research compared to master level universities. Medical school presence represents a fundraising advantage. Faculty productivity is positive among research and doctoral universities. University executives produce efficiency improvements but only in doctoral granting universities. Some evidence of crowding out exists and suggests government funding reduces private philanthropy. The findings suggest recession induced declines in private giving may have been lessened as a result of university wide fundraising efficiency improvements. Although data improvements are needed, the paper is believed to be the first to offer the rigor of frontier analysis in evaluating fundraising production and efficiencies and should be of interest to university and public policy decision-makers.

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