Great Colleges Don’t Need to Buy Love with Legacy Preference
June 15, 2020
By Katlyn Riggins and James Murphy
Great colleges inspire devotion and generosity by making alumni proud, not by trading admissions spots for donations.
These are dark days for colleges and universities. Even the wealthiest institutions are reeling from the effects of the COVID-19 pandemic. And yet, it is a great time to eliminate legacy preference.
Here at ERN, our team has made the case on numerous occasions for ending legacy preference—the deeply unethical aspect of using “hereditary privilege,” largely to the benefit of wealthy, white students in the college admissions process. It’s one of the many systemic ways universities have limited admission to highly qualified Black and Brown students, as well as low-income students.
Setting aside the moral and ethical imperative to ending legacy preferences, it also turns out it’s just bad for business.
The college admissions process will be profoundly challenged in the next few years by the impact of COVID-19 on grades, testing, extracurricular activities, and more. If highly-selective colleges want to maintain their commitment to diversity, they will need more flexibility than ever. Eliminating an unearned advantage that goes largely to wealthy, white students and has nothing to do with merit is a good way to ensure that these schools can continue to recruit the most deserving applicants.
Wealthy universities might be frightened that if they drop the preference they give to legacies in the admissions process that alumni giving will fall off a cliff, but that is just not so.
In 2010, Chad Coffman, Tara O’Neil, and Brian Starr investigated alumni giving at the top 100 national universities between 1998 to 2007. They found “no evidence that legacy-preference policies themselves exert an influence on giving behavior.” Coffman and his team also examined giving at seven institutions that dropped legacy preferences during the period of the study. Again, they found “no short-term measurable reduction in alumni giving as a result of abolishing legacy preferences.”
The reliance on legacy preferences is based on fear, not evidence. Let’s look at some facts.
THE TEXAS CASE
When we compared Texas A&M University (Texas A&M) and the University of Texas (UT), which dropped legacy preference in the past twenty years, to three other large public universities with prominent football teams, we found no evidence that taking away legacy preferences appreciably hurt fundraising at these schools. We chose those comparison schools because they all have deeply loyal alumni who love their alma maters and show them support every football season.
The results: even after it dropped the legacy preference, Texas A&M significantly outperformed comparison schools in terms of dollars raised and UT was near the top of the group in terms of growth in alumni-giving. In fact, UT alumni-giving grew at a faster rate after it dropped its legacy preference. Not for nothing, UT dropped the legacy preference in the middle of the Great Recession.
In 2004, under the leadership of former Secretary of Defense Robert Gates, Texas A&M eliminated legacy preferences, soon after it stopped considering race and ethnicity in its admissions process. In 2011, the University of Texas was banned, by law, from considering “the legacy status of applicants as a factor in admissions.”
As Figure 1 shows, the most significant event for alumni fundraising at both schools was the Great Recession that began in 2008 and which is associated with major declines in giving over multiple years. Note, however, the trendlines following the elimination of legacy.
In the year after Gates’s high profile announcement, alumni donations at A&M did dip, but they were followed by several years of extraordinary growth. It took just two years for alumni-giving to get back on track and from there it boomed, only to be cut short in 2009. Alumni donations began recovering from the Great Recession just two years later and by 2017-18 A&M had almost returned to its former height.
We can see a fairly similar pattern at UT: sustained growth in alumni-giving crashed in 2009 but then it recovered. The Great Recession had a similar impact at comparison schools (see figure 2). What is notable is that UT was banned from considering legacy in 2009, with the ban actually taking effect in 2011. Even with the Great Recession, alumni-giving did not decline—a phenomenon that should be noted as we enter a new period of economic downturn caused by Covid-19.
In terms of sheer alumni donor dollars, A&M leads the pack of our comparison schools with the University of Michigan coming in second—no surprise given its popularity with out-of-state students, who tend to be wealthier. Only 53% of Michigan freshmen were residents in 2018, while at UT and A&M those shares were 90% and 94%, respectively.
But absolute dollar amounts only tell us so much about how successfully these universities secure alumni donations. A&M has the largest pool of alumni, so it’s no surprise that it raises the most money. Another way to compare impact is by determining the institutions’ compound annual growth rate (CAGR) in alumni contributing between 2001 to 2017.
Using CAGR as the unit of comparison (see figure 3), Michigan moves to the front of the pack, but the University of Texas also shows strong growth in alumni donations, despite dropping its consideration of legacies in 2011.
If we look at these universities after 2010, the differences between Michigan, A&M, and UT largely disappear, although Penn State had a particularly strong recovery (see figure 4).
Texas A&M’s growth rate in the most recent eight years for which IRS tax data is available shows that it continues to compete for alumni donations at the same level as its rivals in terms of growth, despite having dropped legacy considerations a decade and a half ago.
UT’s continued ability to raise alumni funds is even more remarkable, as shown in figure 5, which displays the Texas institutions’ CAGRs when they still gave legacies preference in the admissions process and after they stopped.
UT’s alumni donation growth rate actually increased after it dropped the legacy preference, which runs contrary to what some university presidents would have you believe and perhaps even believe themselves.
Today the nation faces a new financial crisis, but UT’s experience shows that a deep recession need not be a moment for a university to accelerate the use of regressive practices, like legacy preference, that undermine economic as well as racial diversity.
Universities face a period of increased risk and uncertainty in the coming years due to the damage COVID-19 has done to the economy and education, but the pandemic has hit students and their families just as hard. Unlike some of the wealthy universities that continue to provide legacy preferences, these families don’t have billion dollar endowments to help them through tough times. Low-income, minority, and first generation students, who need college degrees now more than ever, and who also need financial support to make college affordable, have enough disadvantages in the college admissions process. It’s beyond time for universities to remove at least one of them.
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