Why Do People Donate? Motivation of Major Donors in Higher Education

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Why Do People Donate? Motivation of Major Donors in Higher Education WHY DO PEOPLE DONATE? MOTIVATION OF MAJOR DONORS IN HIGHER EDUCATION By Karin Chao-Bushoven A Thesis Presented to The Faculty of Humboldt State University In Partial Fulfillment of the Requirements for the Degree Master of Arts in Education Committee Membership Dr. Elizabeth Miller, Committee Chair Dr. Eric Van Duzer, Committee Member Dr. Elizabeth Miller, Program Graduate Coordinator May 2020 ABSTRACT WHY DO PEOPLE DONATE? MOTIVATION OF MAJOR DONORS IN HIGHER EDUCATION Karin Chao-Bushoven Higher education has relied on private philanthropy since the establishment of the first universities in the U.S. This reliance has increased over the decades as a result of rising costs and decreased government investment. As such, it has become more critical to better understand what factors motivate philanthropists to increase their support of higher education; including direct support for teaching and research and increasing financial support for those students otherwise not able to pursue secondary education. However, much of the existing data focuses only on point-of-philanthropic-act, and neglects to examine motivational factors of long-term donors that have progressively increased their giving. The objective of this study was to better understand two key factors: 1) why a donor may increase their giving, and 2) why continue contributing to the same university over the years. This study included qualitative survey of major donors from a mid-sized, private, faith-based university. Five themes emerged from which three conclusions were derived: (1) donors’ core values and their identification with the organization’s mission; (2) trust, transparency, and the tenuous nature of the relationship between a donor and the organization; and (3) responsibilities of university leadership in philanthropy. These data ii suggest that integration of these factors in higher education donor relations may serve to better meet the increasing reliance on continued and increased private investment. iii TABLE OF CONTENTS ABSTRACT ........................................................................................................................ ii INTRODUCTION .............................................................................................................. 1 LITERATURE REVIEW ................................................................................................... 5 Introduction ..................................................................................................................... 5 History and the Practice of Philanthropy ........................................................................ 5 Philanthropy in the United States ................................................................................... 7 Nonprofit organizations and their economics ............................................................. 8 Issues and controversies in nonprofit philanthropy .................................................. 10 Education Philanthropy in the United States ................................................................ 14 The need for philanthropy in higher education ......................................................... 15 The work of fundraising and institutional integrity .................................................. 17 Faces of Philanthropy and why they donate ................................................................. 21 Predictors of giving, donor motivation, and retention .............................................. 23 Conclusion .................................................................................................................... 29 METHODS ....................................................................................................................... 32 Introduction ................................................................................................................... 32 Research Site ................................................................................................................. 33 Participants .................................................................................................................... 33 Instrument ..................................................................................................................... 34 Procedure ...................................................................................................................... 34 Qualitative Analysis ...................................................................................................... 37 iv RESULTS ......................................................................................................................... 38 Motivated by Personal Asks ......................................................................................... 38 Sense of Blessing .......................................................................................................... 39 Joy and Legacy ............................................................................................................. 40 Religious-Connectedness Vision .................................................................................. 42 Trust and In-Depth Relationships ................................................................................. 43 DISCUSSION ................................................................................................................... 45 Identification with Core Values .................................................................................... 45 Trust, Transparency and Tenuous Relationships .......................................................... 48 Responsibilities of the University Leadership .............................................................. 51 Implications .................................................................................................................. 53 Future Research ............................................................................................................ 55 REFERENCES ................................................................................................................. 56 v LIST OF APPENDICES Appendix A –Interview Questions .................................................................................... 68 Appendix B – Informed Consent ...................................................................................... 70 Appendix C - Codes from respondents' answers and sample quotes ................................ 72 vi 1 INTRODUCTION “We make a living by what we get. But, we make a life by what we give.” -Winston Churchill The Oxford dictionary defines philanthropy as “the desire to promote the welfare of others, expressed especially by the generous donation of money to a good cause” (“philanthropy,” n.d.). In 2016, Americans donated over $390 billion to 1.5 million nonprofit organizations throughout the United States, the largest amount in modern day giving history (Giving USA, 2017). Non-profit entities have come to rely on these donations in support of and to advocate for better human and ecological conditions. These community-benefit organizations have used donor contributions in the human services sector, for providing basic needs such as food, clean water, and shelter, or for paving roads and rebuilding communities after mother nature’s ravages; in the education sector, for supporting inner-city after-school enrichment programs or for ensuring family literacy resources at neighborhood community centers; in the public-society benefit sector, for supporting and advocating voter education, civil liberty, and economic equality; in the environmental and animal welfare sectors, for decreasing greenhouse gas, stopping further erosion of the ozone layer, improving water and air qualities, or for eliminating deforestation and encroachment into animal habitat for human gains. Other examples of donor contributions making a difference include advancements in health and science research, arts and culture, and international affairs. These are but a few examples 2 of the overall nonprofit sector’s work in our society, with the support of philanthropic donations. With the reliance on private philanthropy, examining what motivates donors has populated the nonprofit literature (Bekkers & Wiepking, 2011). Most donor motivation studies are conducted at the point of actual philanthropic acts. However, there is scant literature exploring the motivational factors of donors when they made smaller-size gifts initially and their decision-making processes to increase their donations significantly over time as consistent and committed donors to the same organization. This lack of a sufficient literature on the motivational factors of long-term donors who progressively increased their gifts from initial small amounts to major philanthropic investments has hampered fundraising efforts in American higher education. Strickland’s study of the Kalamazoo Promise (2009), a privately funded scholarship program for students in the Kalamazoo, Michigan schools, illustrates the need to gain insights into what motivates once small-annual fund donors to become major philanthropists of an educational institution. Our global-and-high-technology society’s increased need for an educated workforce, increases in tuition, and decreases in government aid to universities and colleges all support the call for more investigation of the factors related to growing philanthropic contributions over time (Latta, 2010; Mitchell, Leachman & Masterson, 2017). In preparing students
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