<p>Taxguy wrote in a recent thread on SCAD regarding the school's status as a for-profit (proprietary) school "Response: SCAD is different from all these in that SCAD is, or at least was when I last looked, a "for profit" school. While all of the above are "non profits." Non profit status is usually preferred because they pay no taxes and get much lower rates on postage. The only reason for a school to remain "for profit" is to enrich the owners as much as possible, which is more limited with non profits. I always suspect any school that is "for profit" even SVA even if SVA has a fine reputation."</p>
<p>My daughter is an admitted freshman at SVA and I look forward to discovering more about the school which I will share in this forum. As a result of the above comment regarding SVA's "for profit" status I decided to dig a bit deeper. On a previous post I wrote that from a review of SVA's annual report it appeared that most of the profits were being returned to the school. The following is a quote from testimony given before the U.S House of Representatives by SVA's President David Rhodes; "A rigorous arts education is sufficiently costly that SVA, although a closely held for-profit institution, has never paid dividends to its stockholders. All of SVAs surpluses are reinvested in the education of its students." </p>
<p>Taxguy, you have made several remarks about SVA's for-profit status and while I certainly appreciate the information; it seems to be a bit of misinformation as it paints SVA with the same broad brush as other proprietary schools while not providing information specific to SVA.</p>
<p>I am not trying to pick a fight, but I do think it is important to be specific and to be able to support statements with documented information. If there is more specific negative information regarding SVA's for-profit status, I would be very interested in hearing about it.</p>
<p>Unsoccer-mom, I am not denying the quality of SVA. Let me make that clear. I do believe that SVA is not only a fine art school but is one of the better "for profit" institutions!' I specifically like their animation and digital program offerings. US News and World Report ranks their graduate program overall in the top 10 fine arts masters programs and their graphic design program also is highly ranked.</p>
<p>However, that said, there is no reason to remain "for profit" UNLESS someone wants to be enriched. Why?</p>
<ol>
<li><p>For profit schools pay taxes. Non profits generally don't . Why remain a "for profit" school just for this reason alone?</p></li>
<li><p>Donors will get a deduction for contributions to non-profit schools. This is NOT true with a "for profit" school. Thus, you severely limit donations and charitable contributions with "for profit" schools and probably will never achieve any significant endowment. Again, why remain "for profit" with this one major disadvantage?</p></li>
<li><p>Non profit schools get much lower postal rates than "for profit" schools. </p></li>
</ol>
<p>Again, I distrust any school that is "for proft." If SVA was so interested in plowing back money into the school, wny not convert to a non profit status? It isn't that hard or expensive. Moreover, as you noted, SVA was investigated by the government under the titleEnforcement of Federal Anti-Fraud Laws in For-Profit Education. Even the government suspects "for profit" schools for the reasons given above.</p>
<p>If you feel that there is more to this than what I am saying, I would advise you to ask a tax lawyer who specializes in non profits about the benefits and detriments of "for profit" vs. non profit status. I am not infallible. Maybe there is something that I am missing.</p>
<p>As I said, I think SVA is a fine school. However, I don't understand why they would remain a "for profit" institution if they were really interested in plowing the money back into the school. I suggest that there are some hidden benefits to the owners or their families that is not shown in the financial statement.</p>
<p>Oh my goodness!!! I did not say that SVA had been investigated for fraud. The way I read his testimony is that was on behalf of proprietary schools in general. Here is an excerpt: </p>
<p>[Rhodes said federal higher education law can be changed without exposing students and taxpayers to the types of abuses uncovered during the 1980s that led to the adoption of tougher federal laws against fraud. </p>
<p>There is a notion sometimes expressed that for-profit institutions are somehow less worthy of governmental support than public or not-for-profit institutions. This is a deeply ingrained prejudice, but one that I hope you would agree, upon reflection, is wrong, Rhodes said. As long as state approving agencies, accreditors and the Education Department use the tools already at hand, the public and students can be assured that they will be protected from those abuses that occurred well over a decade ago. ]</p>
<p>This is a link to a press release from the committee: </p>
<p>While I have no way of knowing why SVA chooses to remain "for-profit". Your speculation is no more than that. Yet you state it as if it were the truth, and you have misread and wrongly re-stated what I wrote.</p>
<p>No, their testimony was part of a fraud investigation of the "for profit" industry and certainly NOT necessarily SVA itself. Your reply is that this investigatioin was the bulk of my feelings,which is NOT the case.</p>
<p>Yes, My statement is speculation. Does that make you feel better? I think that I have said what I needed to say. You can take it from here.</p>
<p>From the SVA website regarding charitible contributions to the school's Alumni Society:</p>
<p>[Your donation to The Alumni Society of School of Visual Arts provides scholarships and awards to matriculated SVA students in all majors. On-line donations are designated for the Alumni Scholarship Fund, and 100% of your donation directly benefits students. No contributed funds are used for overhead or administrative costs. All donations to The Alumni Society of School of Visual Arts, Inc., a non-profit, 501(c)(3) organization, are fully tax deductible.]</p>
<p>Hmm, the alumni society must be a tax exempt organization. Interesting.</p>
<p>Unsoccer-mom, if you would, we would LOVE to hear about your daughter's experiences at SVA. They have some great looking offerings. If she could be as detailed as possible regarding the quality of her courses, dorms, life in NY, teachers etc, it would be greatly appreciated.</p>