Armen Alchian made many important contributions to our understanding of organizations. One of the most important insights was related to organizations of higher education and the existence of tenure. However, the primary empirical predictions of his explanation for tenure have remained unexplored. This paper provides some empirical evidence on these predictions. Alchian’s predictions receive strong support. The results indicate that tenure is significantly more likely to occur in nonprofit institutions than in for-profit institutions, tenure is more common in public institutions than in private nonprofit institutions, and among private nonprofit institutions the incidence of tenure is positively related to the level of endowment support and negatively related to the institution’s reliance on tuition and fees.

We study corporate philanthropy using an original database that includes firm-level data on dollar giving, giving priorities, governance, and managerial involvement in giving programs. Results provide some support for the theory that giving enhances shareholder value, as firms in the same industry tend to adopt similar giving practices and firms that advertise more intensively also give more to charity. But much of our evidence indicates that agency costs play a prominent role in explaining corporate giving. Firms with larger boards of directors are associated with significantly more cash giving and with the establishment of corporate foundations. Consistent with effective monitoring by creditors, firms with higher debt-to-value ratios give less cash to charities and are less likely to establish foundations. The empirical work considers the impact of industry regulation on giving and controls for state philanthropy laws and fiduciary responsibility laws.