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Alumni Giving And Student Loan Relief: Philanthropy’s Impact On Graduates
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By Mohd Isa Rohayati Mohd Isa Rohayati Scilit Preprints.org Google Scholar 1, * , Youhanna Najdi Youhanna Najdi Scilit Preprints.org Google Scholar 2 and John C. Williamson John C. Williamson Scilit Preprints.org Google Scholar 3
Received: 11 April 2016 / Revised: 27 May 2016 / Accepted: 31 May 2016 / Published: 13 June 2016
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Currently, higher education institutions face rapidly rising costs and limitations in government funding. Consequently, higher education institutions need sustainable forms of funding to function efficiently and remain competitive. In their efforts to identify causes and initiatives, world universities have paid more attention to philanthropic support. In their effort to raise funds, many institutions have grappled with questions about why donors give and what motivates donors to give. To address these questions, scholars must consider the influence of demographic and socioeconomic characteristics, as well as internal and external motivational parameters on successful giving behavior. However, much more attention has been paid to universities in Western countries and the United States. This study aims to review the factors that influence organizational philanthropic fundraising success and to gain an understanding of factors that influence donors’ giving decisions and perceptions of giving. This work focuses on donors’ donations to Malaysian and Australian public universities.
Public higher education institutions are increasingly challenged by high and rapidly rising cost pressures. In the longer term, this pressure has resulted in costs exceeding available income [1]. Indeed, today’s universities face unprecedented challenges [2], especially in terms of matching income with rising costs and accommodating increasing demands for growth and higher quality to remain globally and nationally competitive. As a result, most of the public universities in the world are looking for ways to cut costs, improve productivity and develop alternative sources of income [3]. This situation calls for diversification in public higher education institutions’ funding mix.
Since government funding is limited [4] and may reach the politically acceptable maximum at some point in the near future, revenue enhancement is normally achieved by shifting a larger share of costs to non-taxpayer sources [5]. To remain competitive, universities can no longer maintain the status quo; rather, they should share the cost burden of higher education more broadly. Therefore, an increasingly important and largely underdeveloped financial stream for public higher education institutions is philanthropy [6, 7, 8], that is, donations from the general public to the universities for either specific or unmarked purposes. Philanthropy is associated with the action of “expressing love to humanity” [9] and is often focused on the betterment of humanity rather than just serving the needs of the poor. In the context of defining the action of giving to higher education, Cascione [10] said: Giving to higher education institutions is best understood as philanthropic, since it is mostly indirect and programmatic and the institution is expected to means of tuition or other benefits of education. (p. 5) Cascione suggested that “philanthropy is often earmarked for institutions that provide the infrastructure to uplift individuals”. (p. 5)
The growing importance of philanthropy for higher education around the world can be found in the literature, as institutions have adopted philanthropy to meet their funding needs [ 11 , 12 , 13 , 14 , 15 , 16 , 17 ]. In addition, the literature has extensively discussed factors influencing giving behavior [18, 19, 20, 21, 22, 23, 24], strategies for successful higher education philanthropy [12, 25, 26, 27, 28, 29, 30]. and institutional advancement [ 31 , 32 , 33 , 34 , 35 , 36 ]. In order to create a successful philanthropic “model”, it is important to compare and contrast the experiences of a more mature model of philanthropic success for higher education institutions. Most of the relevant investigations were conducted in higher education institutions in Western countries, especially in the United States. To date, no study has investigated factors influencing individuals’ donation to Malaysian universities. Similarly, in Australia, despite the growing research on philanthropy [ 37 , 38 , 39 , 40 ], only a few studies have examined some public higher education institutions. However, these studies have not been comprehensive or comprehensive. Therefore, this review focused on the university giving of the United States literature despite the countries’ differences, i.e. demographics, socioeconomic background, giving culture, compared to Malaysia and Australia.
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Therefore, this review seeks to explore the knowledge base of institutional advancement and to identify the gaps in knowledge regarding: (i) the importance of philanthropic support for universities; (ii) the elements of a successful institutional fundraising program; and (iii) the factors that influence giving and donors’ perceptions of their philanthropy in a successful higher education fundraising effort. The review aims to compare and contrast private philanthropic support as a potential revenue stream for higher education institutions between a developing country, Malaysia, and a developed Western society, Australia, and to understand “what” the university can do to succeed.
Australia has the following characteristics: a young higher education system relative to that of many developed Western countries and a culturally diverse society. These features form the rationale for comparing Australia and Malaysia, a multiracial society with a higher education system that needs to leverage philanthropic donations.
Acceptance of the need to diversify universities’ funding streams, particularly by exploring new funding opportunities to keep universities competitive, is increasing. In this situation, the importance of fundraising for the higher education sector worldwide has increased [41]. Higher education requires sustainable forms of funding to function effectively. Currently, sources of income for public higher education institutions are mainly the government, tuition fees, research grants received from public or private bodies and the institution itself. Philanthropy is a very productive type of financial support and a potentially significant source of external income for higher education institutions [8].
Almost all national and state governments are tightening their budgets and providing less funds to the education sector [42], while at the same time forcing more public scrutiny on how an institution uses its resources. Budget allocations within one of the researcher’s own universities have been reduced year on year, but the government’s expectation of “excellence” has increased. However, with the regulations limiting tuition increases, many institutions are unable to set their own price level, limiting their ability to meet their mandates [42].
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To maintain competitive advantage and to ensure long-term survival and growth, public higher education institutions (PHEIs) must access an increasing amount of external resources [13]. According to Chung-Hoon et al. (2005) [13], significant resources are available in external networks, and universities must create strategic network alliances and relationships to access these resources. A university must consider how best to balance the need to separate the functions of governance and philanthropy while maintaining and enhancing the viability and robustness of both functions [2]. The growing importance of philanthropy for higher education around the world can be found in the literature, as institutions have adopted philanthropy to satisfy their funding needs [ 12 , 14 , 15 , 16 ].
While some institutions have succeeded in attracting philanthropic support, many still struggle to achieve success. This raises the following question: “what is the formula for a successful philanthropic approach of higher education institutions?” How should these institutions organize, structure, function and strategize to attract the public’s attention? To answer these questions, we must “unpack” the elements of a fundraising program found in the literature and examine their contributions to fundraising success. Figure 1 shows the framework that conceptualizes a university’s philanthropy action. The framework is derived from the combination of two sources: first, research on open systems theory for fundraising and the factors that influence organizational fundraising success (Tempel, 2010, [43]); and second, research on social exchange theory for fundraising. Research on open systems theory suggests that in order to achieve successful fundraising, the organization must be connected to its external environment and must operate in a governance structure by understanding its mission (Tempel, 2010, [43]). This approach allows us to investigate
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