Private Colleges are not Humanitarian Organizations

Applying to College
1

<p>I've seen many topics crop up over the years on CC about the "fairness" of college admissions, especially with regards to admission of legacies. </p>

<p>Colleges should be meritocracies, college bereaved teenagers cry.</p>

<p>But aren't private colleges businesses like any other? They are not paid by the federal government to educate students, and therefore they handle themselves just like a Wal-Mart or business firm does- the try to make money, and lots of it. Don't get me wrong, I would love it if Harvard was impervious to donations, because it would mean that those people starting on the lower rungs of society, those who need the affluence that a top notch and prestigious education could yield. However, I think that as soon as people make themselves the victims, wining and moaning about "unfair" admissions, one must walk the shoes of the Harvards, the Yales, the Stanfords, the MIT's, and realize this; it's about yielding the dollar, not yielding a fan base. </p>

<p>With that in mind, I think that we should not focus so much on the "problem" and focus more on the solution. To that end, I think that pressuring the federal government to subsidize colleges to yield more top notch (and hopefully prestigious) government sponsored universities is a step in the right direction. Granted, a school that offers an education as good as Harvard's won't immediately have the same reputation, but one must remember that reputation is cultivated with time and big names, and it is not an overnight process.</p>

<p>It's just a suggestion but it operates on an underlying premise- it's time to stop blaming legacies and AA or whatver other scapegoats exist, and it is time to seek solutions, not restitution.*</p>

<p>*This onslaught was brought on by the stupidity saturated video posted here: <a href="http://youtube.com/watch?v=nG6OHBjaLNE%5B/url%5D"&gt;http://youtube.com/watch?v=nG6OHBjaLNE&lt;/a&gt;&lt;/p>

<p>Disclaimer: I am not a business owner, I am not a legacy, and I am not a beneficiary of 6 figure donations. I'm just a high school junior with his own arguments. =|</p>

2

<p>"I think that pressuring the federal government to subsidize colleges to yield more top notch (and hopefully prestigious) government sponsored universities is a step in the right direction."</p>

<p>You have no idea what you're talking about....</p>

3

<p>kk19131 How so?</p>

4

<p>
[quote]
But aren't private colleges businesses like any other? They are not paid by the federal government to educate students, and therefore they handle themselves just like a Wal-Mart or business firm does- the try to make money, and lots of it.

[/quote]
</p>

<p>Actually many colleges are non-profit organisations. And they do get funds from the federal government.</p>

<p>Other than that, you make very valid points!</p>

5

<p>I think it's good to look at it realisticly for what it is: a business. And we should also take their student body with a grain of salt as well - they aren't all rocket scientists...and those who end up at state schools aren't all "dumbasses" either. Some perspective would be refreshing.</p>

6

<p>Yes, they are non-profit, but the school needs money to run - pay its employees, fund construction projects, award financial aid/scholarships, pay for energy and other utilities, and every year, costs keep rising.
They have to make the money. Sure, individuals won't benefit, but the college has got to stay afloat.</p>

7

<p>Sorry for the confusion I should have been more direct. I think that pressure should be put on government to fund those institutions MORE, or raise the bar more.</p>

8

<p>"But aren't private colleges businesses like any other?"</p>

<p>No. Businesses strive to make a profit. Profits are distributed to owners of the business. Who owns Harvard? Who gets the profit?</p>

<p>Having to have money to survive doesn't make an entity a business. That sort of definition makes every organization a business, be it a soup kitchen, homeless shelter or church.</p>

9

<p>"Who owns Harvard? Who gets the profit?"</p>

<p>The professors make the profit, and essentially the "President and Fellows of Harvard College (also known as the Harvard Corporation)" and the "Harvard Board of Overseers" essentially own Harvard.</p>

<p><a href="http://en.wikipedia.org/wiki/President_and_Fellows_of_Harvard_College%5B/url%5D"&gt;http://en.wikipedia.org/wiki/President_and_Fellows_of_Harvard_College&lt;/a&gt;&lt;/p>

<p>homeless shelter volunteers do not profit from volunteering, priests and deacons do not receive salaries so much as what is barely necessary to survive. Soup kitchen volunteers do not profit from volunteering. Professors make a lot more than they need to survive- they are not volunteers. Professors and the president and the boards of directors are the ones receiving pay raises and the benefits reaped from profits. </p>

<p>Making money and profiting are not the same thing. A profit is a significant NET GAIN, whereas the bodies you mentioned make little to no net gain.</p>

10

<p>
[quote]
But aren't private colleges businesses like any other? They are not paid by the federal government to educate students, and therefore they handle themselves just like a Wal-Mart or business firm does- the try to make money, and lots of it.

[/quote]
</p>

<p>Well, actually, they are not private businesses. They are substantially different from private businesses. </p>

<p>First off, if private colleges were really profit-maximizing businesses, then they would explicitly sell their admissions slots, and only bring in people who are actually going to pay full-fare. For example, if Harvard really wanted to maximize its profits, they could simply refuse to admit a single student who needed financial aid. They could sell their admissions spots on the open market, and do so openly. Now, of course one might say that to some extent Harvard already does this by offering admissions spots to those who donate millions. But this happens * secretly *. A private business would surely not have to conduct such business secretly. For example, Bentley openly sells million-dollar cars, and doesn't feel the need to hide it. Private businesses are allowed to openly sell their wares for whatever the market will bear, and nobody bats an eye. But the fact that universities sometimes do the same is a matter of great social controversy, which is why universities feel the need to hide it when they do it, which indicates that universities are not really private businesses, or at least are not perceived as such. </p>

<p>Secondly, and perhaps more importantly, univeristies are non-profit organizations. Hence, a key difference between them and private businesses is that * universities get to operate tax-free *. Private businesses can't do that. When Harvard makes a profit from its investments, it never has to pay any taxes on it to the government - either Federal, state, or local. Walmart can't just make a profit and then simply "decide" not to pay any taxes on it. If they did, they would be prosecuted and possibly liquidated. Similarly, when rich donors decide to contribute to Harvard, that contribution is tax-deductible. That's not true of private businesses - you can't just donate a bunch of money to Walmart and then try to claim a tax deduction for it.</p>

<p>Hence, the point is, if universities want to behave as private businesses, then they should be treated as private businesses, and specifically, they should be * taxed * as private businesses are. If universities are going to be given freedom from taxes (which basically amounts to a large government subsidy), then it is because they are supposed to be fulfilling some other social goal other than simply making money, and then it is entirely proper for society as a whole to question whether those tax-free universities are in fact fulfilling those social goals. For example, if Harvard really was just a bastion of only the rich, and the benefits of Harvard never accrued to the rest of society, then it is entirely proper for society to question whether Harvard really deserves freedom from taxes.</p>

11

<p>Most colleges are already subsidized, and frankly, the idea of giving the federal government control over universities sounds like one large, poorly run, bureaucratic nightmare. There are things the federal government should do, and things it should not, and university administration is certainly not one of those things. </p>

<p>Also, the problem with American education almost certainly lies within k-12 and not higher education, and surely not within privately-run, elite institutions. If you really want to help the "lower rungs of society", then changes at the basic k-12 level are needed, and not more government involvement. </p>

<p>Many make it seem like elite universities are full of unqualified, rich, minorities. That is, BY FAR, not the case. Blaming a university for operating like a business is not a way of solving anything, let alone of making college admissions more "fair".</p>

12

<p>These last two posts are so clear and well-done that there is little to add, but somehow I have just a bit more to say.</p>

<p>Professors do not own the university, anymore than high school teachers own the high school.</p>

<p>The Trustees have the responsibility to serve to promote Harvard's goals, which do not include making a profit. Its president writes, "Harvard has grown into a great university with a mission to advance knowledge, promote teaching and research, and help society discover new ways to overcome its most pressing problems." <a href="http://www.president.harvard.edu/%5B/url%5D"&gt;http://www.president.harvard.edu/&lt;/a&gt;&lt;/p>

13

<p>Indeed, colleges are classified as nonprofit charity organizations.</p>

<p>However, as we all know, legality and truth are not necessarily synonymous. I contend that universities are legally nonprofit but in reality are making a profit (see previous post) based on the services they provide. The profit is made from donations which should be tax deductible. </p>

<p>Just because universities are treated as non profit does not mean they do not behave like businesses. Maybe the problem is the treatment of schools, not the nature of schools.</p>

14

<p>You said Trustees and professors get the profit. But they don't. (see my post, # 12)</p>

<p>You said that universities behave like businesses. But they don't. (see sakky's post, #10)</p>

15

<p>But to behave like businesses, they'll be selling spots. I think your points would be more credible if you said Private colleges have no obligation to be fair!</p>

16

<p>" Harvard University gave then-president Lawrence Summers a severance package valued at about $2 million when he surrendered the office last year.</p>

<p>The Ivy League school also paid $55.2 million in fiscal 2006 to the investment firm run by former endowment manager Jack Meyer, according to Internal Revenue Service documents released today. His Convexity Capital Management LP oversees bond portfolios for Harvard, the world's richest university with a $29.2 billion endowment."</p>

<p>Bloomberg.com</p>

<p>"As university president he was paid an annual salary of $563,000"
wsws.org</p>

<p>Again, just because universities are treated as non profit does not mean that they do not behave like businesses. Hence the cultivation of legacies who will contribute more money in the future and the correlating salary of the staff.</p>

<p>In response to post #15</p>

<p>They are essentially selling spots in that they require tuition (the exception being financial aid for those who can't afford it). If you don't qualify for enough aid and don't have the money to send your child to these schools (some middle class families), your child cannot attend. A similar system is in place with summer programs that offer minor scholarships but still require tuition.</p>

<p>Morally, they are obligated to be fair. Legally, in some cases they are required to be fair.</p>

17

<p>If you think professors are receiving the profit, then EVERY employee of every business is a partial owner who receives profit. That is rather far from the everyday meaning of profit and ownership.</p>

18

<p>"EVERY employee of every business is a partial owner who receives profit."</p>

<p>Partial owner, no. Beneficiary of the profit, yes if you are referring to every business.</p>

<p>Or maybe I misunderstood your post?</p>

19

<p>Receiving a paycheck (no matter how large) does not mean that one is getting the profit from that organization. Profit is what is left over after the bills are paid. One key cost of a business is paying employees.</p>

<p>You need not be profit-making to have investments. Every foundation has investments so that it can generate income to fund programs over time.</p>

<p>Varied tuition costs are not consonant with ordinary business practices. Businesses do not ordinarily charge different rates for the same good to different people based on what they can pay.</p>

20

<p>Ever think that without donations, there would be less money for financial aid for those who need it? Honestly, if one kid's family donates millions to the university, and that money is funnelled into creating enough money for hundreds of other students to attend on financial aid when they otherwise couldn't afford it, I see that as a plus for a school.</p>