In most economics courses, students analyze markets, incentives and tradeoffs on paper. In ECO 410, Economics of Altruism, Philanthropy, and Nonprofit Organizations, they do it in partnership with real organizations, and their work ends with a decision that carries real weight: how to allocate $40,000 in grant funding among nonprofits serving Kentucky communities.
Taught by Gail Hoyt, Gatton College Teaching Fellow and Caroline Frances Ransdell Research Professor, the course uses a “learning by giving” model that combines economic reasoning, service learning and philanthropy. This fall, a cohort of 23 students partnered with five nonprofits, developed comprehensive analyses tailored to each organization’s work, and ultimately selected Camp Hero as the top grant recipient, with the other organizations also receiving grant funds.
The class is supported by a grant from Gatton alumnus Charles Sonsteby and his wife, Valerie, as part of a philanthropic investment that allows students to study nonprofit economics while building meaningful connections with local organizations. Over time, the Sonstebys have increased their support, enabling students to allocate significant funding across partners and giving them a rare opportunity to practice stewardship, not just theory.
Hoyt first taught the course in 2017 and has now led it nine times, refining the structure to make the student work more useful to nonprofit partners. The central assignment is ambitious by design: each group produces an economic analysis for its nonprofit partner, typically a 30–40-page report completed in stages, revised through editorial feedback and delivered as a final product the organization can use.
That process goes beyond writing. Students also volunteer with their partner organizations to gain firsthand understanding of the mission and the day-to-day realities behind the data. Toward the end of the semester, each team presents its findings to the class, and students vote on how to allocate grant funding. After the celebration ceremony, Hoyt and the student teams visit each nonprofit to walk leaders through their analysis; a 60–90 minute capstone that Hoyt describes as one of the most meaningful parts of the course.
“I love this part because this is when students explain their analysis and what it means for the partner,” Hoyt said.
This year’s course also reflected a shifting nonprofit landscape. Hoyt noted that many organizations are navigating the effects of reduced federal support, making it harder to secure grant funding and meet growing needs. In addition to recommending how to use the class grant, students worked to identify useful data and metrics nonprofits could incorporate into their own grant proposals and explored new strategies to diversify funding streams and expand donor support.
Hoyt said this year’s students stood out for their leadership and commitment to community impact. Early in the semester, the class created its own mission statement and values document to guide their process, emphasizing collaboration, transparency, equity and a commitment to strengthening Lexington nonprofits through careful analysis and service.
One student reflection captured the shift from academic exercise to real-world responsibility: “I am a senior and this is the first college course I have taken where I feel like an adult and not a teenager. What we are doing really matters to someone else and I feel responsible for the outcome.”
Hoyt said that sense of obligation changes the way students approach the work.
“While grades seem to matter, as they almost always do to students, it becomes evident that their sense of obligation to their nonprofit partner is also driving them and increasing the caliber of their work,” she said.
This year’s nonprofit partners reflected a wide range of needs across Kentucky and the region:
GreenHouse17, which supports survivors of domestic violence through shelter, legal advocacy, job training and healing-centered programs.
Amachi Central Kentucky, which pairs youth affected by parental incarceration with mentors who provide long-term guidance and support.
Grin Grant Inc., which provides recovery support services and dental restoration for individuals affected by substance use and domestic abuse.
Glean Kentucky, which rescues surplus food and redistributes it to address food insecurity and reduce food waste.
Camp Hero, which serves veterans, first responders and at-risk youth through outdoor retreats, peer support and trauma-informed programming.
For Hoyt, the partnerships are a reminder of what economic tools can do when paired with human context and trust. In several cases, she said, students helped nonprofits rethink how they framed impact for donors or identified operational changes that could meaningfully expand capacity.
One example came through the team working with Grin Grant, which had viewed its long waitlist as a shortcoming. The students helped the organization see that demand could be reframed as evidence of need, a compelling story for donors and grant makers.
Hoyt said one of the most powerful experiences this year came during a visit to Camp Hero, where she and students met with participants and leaders at the camp in Jackson County.
“We sat in a hunting lodge with six state troopers from Alabama who were participating in a retreat,” Hoyt said. “They shared their experience and why being at Camp Hero meant so much to them. This was one of the most moving experiences I personally have had in the time I have been teaching the course.”
Hoyt hopes the course leaves students with skills that extend beyond economics: communication, diplomacy, adaptability and the ability to explain empirical work to people who don’t speak in technical terms. She also hopes it influences how students think about responsibility; whether they go on to work in business, government, or the nonprofit sector.
Whether graduates end up working for a nonprofit, serving on a board, or supporting community organizations as donors, Hoyt said she wants them to understand that economic reasoning can be used to strengthen missions rooted in compassion.
“I’ve learned that altruism is not naïve or purely sentimental, but strategic, complex, and grounded in economic reasoning,” Hoyt said. “Perhaps most striking is how seriously students rise to the occasion when they know their work matters beyond the classroom.”
And for alumni and donors considering how to support students, Hoyt said the impact of the course reaches well beyond a single semester.
“Supporting this course directly strengthens both student learning and the local nonprofit ecosystem,” she said. “This year, the Sonstebys entrusted students with the responsibility of allocating $40,000. That level of trust was both humbling and transformative.”
