Abstract: As state appropriations, once the primary public source of funding for higher education, have decreased, higher education institutions have attempted to increase the private funding they can generate in addition to increasing tuition. This shift from public to private sources of funding for public higher education institutions requires a better understanding of the relationship between these two sources of funding. The purpose of this study was to explore the change in philanthropic funding for public four-year higher education institutions from 2004–2018. It examined the relationship between state appropriations and philanthropic funding received by public four-year higher education institutions to determine if state appropriations were associated with philanthropic giving. It also investigated whether the relationship differed by institutional type and competitiveness to determine if it increased stratification among public higher education institutions. This study found that between 2004 and 2018, total philanthropic funding per FTE increased while state appropriations per FTE decreased. The main reason for these trends were decreases during the recession, where state appropriations per FTE decreased 21% while total philanthropic funding per FTE only decreased 3%. All types of philanthropic funding had a U-shaped growth curve showing a decline then increase except for foundation philanthropic funding per FTE, which grew linearly. State appropriations were found to be associated with the amount of philanthropic funding received. An increase in state appropriations was associated with an increase in philanthropic funding from 2004–2010, but a decrease in philanthropic funding from 2011–2018. There were significant differences by Carnegie classification and flagship status but none for Barron’s selectivity. There were also differences based on donor types. The findings add to the research on donor motivations in higher education by showing the differences in growth curves for different donor types. They also add to the literature on philanthropic funding during recessions by analyzing giving trends before, during, and after the Great Recession of 2008. Finally, results show that there was most likely an increase in the stratification of public higher education institutions as they shifted to more private sources of funding, as philanthropic funding is more unequally distributed than state appropriations.
Keywords: Generalized linear mixed model,Growth curve analysis,Higher education finance, Philanthropy