Impact of Matching Funds: Help or Hindrance

In the absence of sufficient public resources or market opportunities to increase tuition fees to implement or augment necessary or desired initiatives, one tool often employed is philanthropy, usually by universities themselves but sometimes in association with government. This study explores the impact of matching funds on philanthropy through, first, a survey of alumni donors to matching programs at the University of Toronto between the years of 1995-2005, a period during which the government had in place a matching program. Subsequently, interviews and focus-group sessions augmented the survey results. Typically, philanthropy and, in particular, matching programs are seen and studied as bilateral relationships between donors and institutions. Institutions set priorities for raising funds and approach donors whom they believe will be receptive to their “cause.” Donors, who may be solicited simultaneously by other institutions to support either the same or different causes, respond or not depending on their wherewithal and particular interests. The object of this study is a trilateral approach to fundraising that involves the government as well as institutions and donors. This raises questions about how donors respond to agency relationships and the triangular inter-relationships between the state, the academy, and the philanthropic market in raising funds in the public interest as well as institutional interests. It is in this context that Salamon speaks about “the third sector” and Burton Clark describes the “triangle” paradigm for which he is well known. The ambivalence of many respondent donors indicates that, in Clark’s terms, there is a limit in the degree to which the state-market leg of the triangle can be tightened or otherwise manipulated to advance public policy goals. Even when the state seeks to motivate charitable giving by influencing the state-market leg, the institutional performance as represented by the university-market leg still makes a powerful difference. Some key findings from this study, are these. Donors seemed unconcerned or even unaware about some of the conditions attached to the government’s matching program. Some donors were motivated favourably by the “cause” (scholarship support) but less so by the match. In other words, “cause” and “match” are not synonymous.Ph.D