Friday, June 15, 2007

Brief History of Philanthropy in American Higher Education

(Text by Michael Lorenzen. Used with permission of the author)

In American higher education, philanthropy is a big deal. From the construction of buildings, upgrade of athletic facilities, the funding of faculty positions, and the build up of the institutional endowment, fund raising is important in academia. Most higher education administrators spend a lot of time engaged in philanthropic work. It has not always been this way though.

Alkin (1992) wrote, “The increasing size, diversity, professionalism, and activism of private philanthropy have made it a powerful actor in education during the twentieth century” (p. 1001). However, it took a large amount of time for this to happen. There can be no certainty when the first philanthropic action was taken on behalf of an institution of higher education in the United States. However, three clergymen from Massachusetts are recorded as having raised 500 pounds for Harvard College, Yale College, and William and Mary College in the 1600s (Gurin and Til, 1990).

George Whitefield was an English preacher who toured what would become the United States of America in 1739. He was a major player in the religious Great Awakening of the 1730s and 1740s. In his preaching, he advocated for philanthropy for the poor, disaster survivors, and institutions of higher education such as Harvard and Dartmouth (Cutlip, 1965; Gurin & Til, 1990).

The first collegiate alumni society was founded in 1821 at Williams College (Brittingham & Pezzullo, 1990). Other private institutions followed suit with the first public university alumni societies forming in the early 20th century (Dolibois, 1977). These alumni societies provided colleges and universities with a new way to solicit funds from their graduates. As an example, Harvard University successfully completed an alumni fund raising drive in 1905 with a total of $2.4 million (Cutlip, 1965). In 1891, the Kansas University Endowment Association was formed at the University of Kansas with the direct intent of getting funds from alumni (Worth, 1982). Legon (2005) wrote that the earliest collegiate foundations were established to "facilitate land acquisition and, eventually, to accept private gifts" (p. 3).

Large research universities developed in the United States of America between the late 1800s and 1920. These institutions of higher education could not have developed and thrived had not American society had the resources to support them. Further, it is clear that society (both government and private interests) wished to support higher education (Carrigan, 1988). For example, John D. Rockefeller gave $600,000 in 1889 to help establish the University of Chicago (Cutlip, 1965).

The decade of 1919 to 1929 was referred to by Davis (1985) as "the golden age of fund raising" (p. 16). Private industry gave lots of money to build colleges, libraries, churches, and other institutions for the public good (Cutlip, 1965). The stock market crash of 1929 which started the Great Depression brought this to a halt. Much of the private wealth of the United States was lost and this directly translated into less giving for philanthropy.

Changes in state and federal laws before, during, and after the Great Depression ultimately helped to reignite the philanthropic drive in the United States. In 1917, Texas became the first state to allow corporations to make charitable donations. By 1941, thirty states had had changed their statutes to allow for corporate philanthropy (Davis, 1985). In 1935, the Internal Revenue Service changed the Revenue Code to allow a five percent deduction for corporate philanthropy (Cutlip, 1965). The overturning of the common-law rule in the 1950s eliminated all legal barriers to corporate philanthropy (Davis, 1985).

World War Two saw the United States shift into a war economy. The focus of fund raising was to find ways to pay for the war effort. During this time period, the power of the mass media was harnessed to drive much of the fund raising by the government with radio being used extensively (Cutlip, 1965). After the war, the 1950s and early 1960s saw a greater increase in philanthropic investments than in personal income or the gross national product of the United States (Cutlip, 1965). Higher education thrived as the GI Bill allowed soldiers to go to college and then it continued to grow as Baby Boomers came of age (Elliott, 2006).

In the last several decades, higher education has lost a lot of public funding as both state and federal governments have had to struggle with budget deficits. Legon (2005) wrote:

As elected leaders attempt to balance state budgets and come to grips with declining discretionary funds, the new financial realities facing higher education become clear. To address state trends, many institutions and systems are increasing tuition and cutting expenses. The cuts…are having significant effects on issues of access and global competition, making it more difficult for higher education to achieve its mandate. (p. 4).

Brinkman and Morgan (2001) wrote, “higher education has been drawing down on what was once a large reservoir of trust” (p. 428). In essence, buyers are starting to doubt that higher education is worth the cost. Those losing trust include different levels of government, parents, and students. Heywood (2006) reported that parents are more concerned with paying for college costs than they are with retirement. He noted that parents often say, “Too bad about retirement savings; my kids are going to college” (p. 10). Some students do not get into college though. Of 900,000 college-qualified high school graduates from low and moderate income families in 2002, over 500,000 were denied access to higher education by either being prevented from enrolling due to lack of proof of ability to pay or they simply did not attempt to enroll (Fitzgerald, 2004).



The funding crisis in higher education has demonstrated that philanthropy is still an important part of funding higher education in the United States. If public funding and tuition can not cover all operating expenses, then other means of revenue must be found and philanthropy remains a large part of this. Heyns (1994) wrote, "Publicly supported institutions are continuing to depend on private support to supplement traditional funding sources…Dependency on voluntary support such as gifts from alumni, friends, and corporations is growing" (p. 37, 38).

References

Alkin, M.C. (Ed.). (1992). Encyclopedia of educational research (sixth edition), v. 3. New York: Macmillan Publishing Company.

Brinkman, P. T., & Morgan, A. W. (2001). Changing fiscal strategies for planning. In J. Yeager, G. M. Nelson, E. A. Potter, J. C. Weidman, & T. G. Zullo (Eds.), ASHE reader on finance in higher education (pp. 425-436). Boston: Pearson Custom Publishing.

Brittingham, B.E., & Pezzullo, T.R. (1990). The campus green: Fund raising in higher education. Washington, DC: School of Education and Human Development, The George Washington University.

Carrigan, D.P. (1988). The political economy of the academic library. College & Research Libraries, 49(4), 325-331.

Cutlip, S.M. (1965). Fund raising in the United States: Its role in America's philanthropy. New Brunswick: Rutgers University Press.

Davis, M. (1985). Corporate philanthropy and libraries: Will the private sector respond to federal cutbacks? Public Library Quarterly, 6(2), 15-26.

Dolibois, J.E. (1977). Alumni affairs. In A.S. Knowles (Ed.), International encyclopedia of higher education (v. 2), San Francisco, CA: Jossey-Bass Publishers.

Fitzgerald, B.K. (2004). Missed opportunities: Has college opportunity fallen victim to policy drift? Change, 36(4), 10-19.

Gurin, M.G., & Til, J.V. (1990). Understanding philanthropy: Fund raising in perspective. In D.F. Burlingame (Ed.), Library development: A future imperative. New York: Haworth Press.

Heyns, E.P. (1994). Fund raising in publicly supported academic libraries of institutions belonging to the National Association of State Universities and Land-Grant Colleges. (Doctoral dissertation, Indiana University, 1994).

Heywood, J.C. (2006). Parents worry more about paying for college than retirement, survey shows. Diverse Issues in Higher Education, 22(25), 10.

Legon, R.D. (2005). The new work of higher education foundations. In R.D. Legon (Ed.), Margin of excellence: The new work of higher education foundations. Washington, DC: Association of Governing Boards of Universities and Colleges.

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