Do government appropriations and tax policies impact donations to public research universities in Japan and the USA?

Abstract

As constraints on government funding to public universities become a trend in higher education internationally, clarifying the impact of government policies on donor behavior from a comparative perspective is an issue of higher education research. This paper aims to explore the impact of government appropriations and tax policies on macro trends in donations to public research universities in Japan and USA. Panel data of donation revenue to public research universities in both countries is used to answer the following two research questions: (1) whether the trends in capital markets affect the donation revenue of public research universities operating under different tax systems in Japan and USA, and (2) how the level of government support to higher education affects donations to American and Japanese public research universities. The primary finding is that stock prices are positively associated with donations in USA; however, there is no evidence that stock prices have a positive impact on donations to Japanese public research universities. These contrasting results imply that higher stock prices do not always induce donations to universities and that it is important to consider each country’s tax structure when looking for possible links between stock prices and donations to universities. Also, donor behavior is independent of the amount of government appropriations received by universities in both Japan and USA; therefore, the recent decreasing trends in government appropriations in both countries do not necessarily attract donors.

Improving the System of Indicators for Assessing the Effectiveness of Modern Regional Innovation Systems

“…It becomes evident that science and education play a significant and essential role in Japan's National Innovation System. In a country with a population of 125.3 million people, there are 604 private, 86 national, and 89 public universities located mostly in large cities that distribute students among themselves by category: national universities that focus on training the personnel for state institutions and organizations, public universities who prepare staff for the municipalities or prefectures, and the private universities that provide cadres for the market (Fukui 2021;Ikegaya and Debbage 2023).…”

Analyzing Three Decades of Philanthropic Giving to U.S. Higher Education (1988–2018)

“…Cheslock and Gianneschi (2008) discovered a slight positive relationship between state appropriations and private donations, suggesting that although there may have been an aggregate effect of raising more funds among public institutions, the relationship was not evident at the institutional level. Newer research in higher education and for nonprofit organizations documents little between levels of philanthropic donation and government support (Fukui, 2020;Lu, 2016). Fundraisers also report that alumni and others evidence little knowledge about changes in state appropriations (McClure & Anderson, 2020) that this affects their giving behaviors.…”