THE RELATIONSHIP BETWEEN INSTITUTIONAL INVESTMENT AND FEDERAL FUNDING FOR RESEARCH by Nikki S. Nseka A thesis submitted to Johns Hopkins University in conformity with the requirements for the degree of Master of Science Baltimore, Maryland May 2021 Abstract There has been a large disparity in the amount of federal dollars received each year between the top 20% of research universities and the rest of the population of research universities. Moreover, special focus universities such as the historically Black colleges and universities (HBCUs) and high Hispanic enrollment institutions (HHEs) have been really getting left behind. This has led to a lack of diversity in research and a lack of players in the research community contributing to the well-being of society.
The purpose of this thesis was to research and discuss the relationship between the amount of funding an institution itself is willing to invest in research and the federal funding that the institution receives. To this end, this thesis utilized data from the National Science Foundation (NSF) called the Higher Education and Research Development (HERD) survey organized by institution, source of funds, and by special focus institutions such as the HBCUs and HHEs. A multiple regression analysis was done on the data to investigate whether there was a difference in the relationship between institutional funding and federal funding for the random sample from the general population of universities and colleges compared with the HBCUs and the HHEs, and during the years 2010 and 2019 which is a span of ten years when special efforts were made by the government to supplement the federal funding given to the HBCUs and HHEs. The multiple regression analysis showed that there was a positive relationship between institutional investment and federal funding and that there was no difference in that relationship between a random sample of universities and colleges from the general population and special focus universities and colleges such as the HBCUs and HHEs, nor was this relationship different in 2010 vs.
Although a cause-and-effect relationship can’t be assumed, ii this positive relationship means that federal funding increased when institutional funding increased across the different populations, the random sample of universities, HBCUs and HHEs and in year 2010 and year 2019. iii Table of Contents Abstract. ii Table of Contents. iv List of Tables.
v List of Figures. 1 Review of the Literature. 10 Discussion of Data Results. HERD Data Table 21……………….
HERD Data Table 31………………. HERD Data Table 33 ………… ……………………………. HERD Data Table 15…,,,,…………. HERD Data Table 19…………………………………………………………63 Appendix F.
HERD Data Table 20………………………………………………………….65 iv List of Tables Table 1. Summary output for the unrestricted data. Summary output for the restricted model with institutional funding only. Random sample of institutions in each population.
Random sample of institutions in each population. Negative relationship for HHEs in 2019. 20 v List of Figures Figure 1. Scatterplot graph showing the relationship between institutional funding and federal funding for the unrestricted model in thousands of dollars.
F-test equation for unrestricted model and restricted model with institutional investment only. 13 vi Introduction In 2019 colleges and universities spent over 44 billion federal dollars for research and development (NSF, 2021). More than eighty percent of federal dollars went to the top 20% of research universities (NSF, 2021). It was easy to see from the data that the allocation of federal funds was not even close to being equitably distributed.
Admittedly, there were many factors that determined who received the most in federal funding and there have been several studies that have tried to identify those factors. The focus of this thesis was on the one factor that was the easiest and most obvious to measure and therefore arguably the easiest to control and that was institutional investment. Author James Harrington said, “Measurement is the first step that leads to control and eventually improvement”. For this thesis, the data from the National Science Foundation for a random sample of all universities in the general population, historically Black colleges and universities (HBCUs) and high Hispanic enrollment institutions (HHEs) were analyzed using multiple regression analysis.
In addition, existing literature was examined on the topic of significant predictors of federal funding including institutional investment. Review of the Literature Universities received funding for research from various sources including the federal government, state government, industry, private foundations, just to name a few. It has been shown by Connolly (1996) that what one source decided to give often depended on the level of funding received from other sources. Moreover, in an article in the Journal of Public Economics called “Does external funding of academic research crowd out institutional support?”, Connolly (1996) asserted that funding from one source 1 encouraged additional funding from other sources.
However, not all studies agreed with this finding. There were studies that said “funding from one of the sources tended to decrease contribution from the others” (Connolly, 1996). Additionally, Connolly (1996) gave a comprehensive argument that a contribution at any given time could have had a multiplier effect and changed the way that other sources gave years down the road. Conversely, decreases in funding from any given source or sources could have also had a multiplier effect that led to the decrease of funds given by other sources for years to come (Connolly, 1996).
Connelly asserted that the correlation between internal and external support was positive for current and future levels of funding (Connolly, 1996). This thesis was like the Connolly study in that it also focused on the relationship between institutional investment and federal funding which are examples of internal and external support. However, this thesis differed in that the focus was on more recent data and also looked at that same relationship specifically for HBCUs, HHEs as well as for a random sample of universities and colleges in the general population. On page 184 in a book called Studies of Supply and Demand in Higher Education in a chapter written by Ronald Ehrenberg, Daniel I.
Rees, and Dominic Brewer (1993) it stated that the policy to increase federal funding for research in an effort to draw more doctoral students and prevent PhD shortages might have led institutions to reason that they could reduce or redirect their own institutional investments for other purposes instead of supporting doctoral students in research. Ehrenberg, et al. also claimed that institutions may have increased their own funding in response to cuts in federal funding (Ehrenberg, Rees, & Brewer, 1993). “Data from the National Science Foundation (NSF) [showed] that while Federal Funds steadily dropped from 1966 to 1988, institutional funds 2 increased during that period” (Ehrenberg, Rees, & Brewer, 1993, p.
The limitations of the study by Ehrenberg, et al. was that the study focused on graduate students between 1966-1988 and on funds received by graduate students as student aid rather than funds received by the institution for research. However, Ehrenberg, et al. did provide a comprehensive analysis for how universities reacted when there was a change in federal funding.
For example, they found that an increase in the number of graduate students supported by external funding tended to decrease the number of students receiving institutional support but that it also depended on whether the change in external support was temporary or permanent (Ehrenberg, Rees, & Brewer, 1993). They stated that temporary increases in federal support didn’t have a big effect on the amount of institutional funds supporting graduate students, but when the increases were perceived to be permanent then institutions reasoned that they could afford to increase their support for graduate students which therefore created a positive correlation between institutional and federal funding (Ehrenberg, Rees, & Brewer, 1993). In this case the authors admitted that they may have overstated the negative correlation between institutional funding and federal funding because funds that a university may have saved during a year of increased federal funding may have led to subsequent increases in internal investment in the following year(s) (Ehrenberg, Rees, & Brewer, 1993). The Ehrenberg study also made a useful observation that institutional support often was related to the institution’s perception of its own wealth level (Ehrenberg, Rees, & Brewer, 1993).
If an institution perceived that its own wealth level was increasing as a result of consistent funding by external sources over the years, it may have logically followed that it would increase its institutional investment in research in response (Ehrenberg, Rees, & Brewer, 1993). 3 Conversely, if the institution perceived that its wealth level was decreasing as a result of constant cuts in external funding, it might have held back institutional funding for research (Ehrenberg, Rees, & Brewer, 1993). This thesis differed from the Ehrenberg study in that the focus of this thesis was to look for what implications institutional funding, HBCU status, HHE status, and year 2010 and year 2019 had upon federal funding. The Ellyson and Krueger (1980) study used multiple regression and simple correlation to test the relationships between institutional commitments and federal funding, and the relationship between federal funding and other institutional characteristics such as the amount of doctor’s, master’s, professional and bachelor’s degrees awarded.
The Ellyson study showed that based on the data for a random sample of 60 out of 200 top research institutions from fiscal year 1975 that there was a strong positive correlation between doctorate degrees awarded and federal funding especially at private universities, and a “moderately strong positive correlation between the amounts of internal research funds [invested] and federal research funding [received]” especially at public universities (Ellyson & Krueger, 1980, p. In fact, it seemed from the Ellyson study that private institutions received more federal funds than public institutions, a topic not addressed in this thesis. The analysis done for this thesis differed from the Ellyson study in that it extended beyond the top 200 research institutions to include research institutions at the bottom of the research funding pool and without respect to public or private control. Moreover more recent data from 2010 and 2019 was used for this thesis.
Muffo and Coccari (1982) did a study to “determine which variables [correlated] highly with success in obtaining external funding” (Muffo & Coccari, 1982, p. They found from their study of “data gathered in 1979 from a sample of member institutions of 4 the American Association of State Colleges and Universities (AASCU)” that “success at obtaining grants [was] significantly correlated with factors such as past success in getting federal grants, emphasis on doctoral study, size of student body and faculty, urban environment, existence of an internal grants program, [having] a grants administration office, and an emphasis on research and publication for promotion and tenure purposes” (Muffo & Coccari, 1982, p. They also found that among all of the independent variables in the multiple regression that the availability of internal grants “became the best predictor of funding success” (Muffo & Coccari, 1982, p. This thesis was similar to the Muffo & Coccari study in that it further looked at the relationship between institutional funding and federal funding.
This thesis differed from the Muffo & Coccari study in that it was inclusive of both public and private universities with varying degrees of success at getting federal funding. Another difference was that the relationship between federal funding and institutional funding for special focus institutions such as HBCUs and HHEs as well as for a random sample of all universities in the general population of universities and colleges and any change that may have occurred in that correlation in a ten-year period by considering Fiscal Year 2010 and Fiscal Year 2019 was explored for this thesis. In a research article called “The Domino Effects of Federal Research Funding” by Lanahan, Graddy-Reed, Feldman (2016), the relationship being studied was federal funding vs. all other non-federal funding and whether those funding sources were complements or substitutes.
It was found that in this study “the evidence suggest[ed] that federal dollars were crowding in investments from other non-federal funders to achieve broad societal objectives” (Lanahan, Graddy-Reed, & Felfman, 2016). However, for the Lanahan et al.