The relationship between municipal government and a local, private, nonprofit institution of higher education (IHE) can be characterized as a delicate balance between conflict and cooperation. In recent years as municipal expenses have significantly increased, revenue generated from tax collection and state aid has lagged, creating an increasing challenge for municipalities to pay for public services. The strain placed on the municipal budget between the revenues and the provision of public services has led many leaders to view IHEs in their community as potential sources of revenue. The provision of public services to an IHE is provided and paid for by the municipal government; whereas the benefits provided by an IHE are received within and beyond the municipal border. This geographic disparity between costs and benefits appears to be at the crux of the dilemma faced by the parties. A conflict, whether perceived or real, is created when the municipality provides public services which the IHE utilizes, but no direct payment is received by the municipality providing the service. This study utilized a mixed-method approach to analyze the economic relationships between IHEs and municipalities in three Massachusetts communities (Boston, Springfield and Worcester). The quantitative phase of the study determined the cost of providing public services to an IHE and the value of the benefits received by a municipality. The results of this phase were utilized to test the tool developed to assess whether the costs for public services provided by a municipality are balanced by the benefits provided by an IHE within that municipality in actual dollar values for a given fiscal year. A qualitative phase of the study was conducted to determine the validity of the tool developed and other components: understanding the costs and benefits provided; the values provided to the other party; and subsequent consequences of the results. This baseline of understanding may lead to improved collaborative, sustainable relationships between a municipal government and an IHE for greater economic benefit to the IHE, residents, municipalities and higher levels of government. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]