Platforms of Resilience for Non-profit education in a For-profit world

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Permalink Reply by John J Caprice on April 22, 2010 at 4:00pm

Dear Joel,
I am a little confused. A "for-profit" corporation is owned by its stockholders and must distribute its profits to the stockholders in the form of dividends annually.
A "non-profit" corporation must distribute its excess funds in the form of salaries to its members annually.
There are different classes of "non-profits" determined by their intent. For example charitable organizations vs. private country clubs. Both are non-profit organizations, but have vastly different functions.
Whether a corporation is a profit or a non-profit for tax purposes, they both make money, The excess monies are handled and taxed differently.

OK! What University is organized as a "For-Profit" corporation? The tax consequences would be extreme.
Large research universities will often partner with for profit companies. These associations are mutually beneficial and are not conflicts of interest.

Colleges and Universities make a ton of money, through donations, tuition and investments, but that does no alter their tax status.
I am not splitting hairs. I just beieve that the profit vs. non profit distinction is not clear to me.

Thanks
JJC

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Permalink Reply by Joel Dupuis on April 24, 2010 at 11:28am

Hi John,

I appreciate your response. We are solely looking at For-Profit education and the impact that this "model" has had on traditional education. More specifically, we are looking at how Non-profit education (the traditional university) is impacted and how that impact can be corrected through resilience: more collaboration with other institutions and K-12, more focus on upgrading curriculum, examination of service methods and how to provide better service as well as access to quality education. Hope that makes more sense.

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Permalink Reply by John J Caprice on April 25, 2010 at 5:57am

Dear Joel,

Can you provide an example of a "for-profit" educational institution?

Once again, these terms are established by the IRS to determine how their funds are accounted for and taxed.

I cannot understand why an educational institution, no matter how small, would elect a for-profit accounting system.

JJC

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Permalink Reply by Joel Dupuis on April 28, 2010 at 2:31pm

Hi John,

A for-profit institution is one in which it is not publicly funded and has shareholders/sells stock and is traded publicly. It is run as a business and is typically less focused like a traditional university (i.e. has dorms, societies, etc.) University of Phoenix and DeVry are two examples of for-profit.

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Permalink Reply by John J Caprice on April 28, 2010 at 6:08pm

Hey Joel,

I believe that they are On-Line providers and may also have some brick and mortar locations.
I also suspect that the majority of their students have full time jobs and responsibilities that prohibit them from attending a full time school.
I took correpondence courses when I was on active duty. They helped me get into a 4 year school after being discharged.

The vast number of Colleges and Universities are non-profit institutions. Without actually counting, I would say over 90% are conventional non-profit insitutions. I can check my mailing lists to confirm my impression.

The existence of for-profit organizations probably do not have much of an impact on the educational system has a whole.
I would compare the number of graduates from both types of organizations, just to get a handle on the numbers. Otherwise you might find that you are jousting with windmills.

JJC

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Permalink Reply by Nellie Makarova-Cross on April 24, 2010 at 10:12pm

Hi, Joel,
Is it a dream of yours to create organizations "driven by flexibility, collaborations and transparency" in education, which would be full of innovation, and adaptation and openness? Do you think that all of it is enough to succeed?

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Permalink Reply by Joel Dupuis on April 28, 2010 at 2:27pm

I don't think that's everything to succeed but I do think it's a good start. I think with the ever-changing economy, the increasing uncertainty with funding to education and an increasing number of for-profit universities, I think not-for-profit universities need to learn to be more adaptive, more flexible and open in terms of access and availability. I think collaboration is going to key. Developing partnerships with other institutions, whether educational institutions, community organizations and the like will be a great way to expand access and opportunities,

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Permalink Reply by Nellie Makarova-Cross on May 2, 2010 at 6:32am

I like your approach, Joel! I think it may be useful to learn how to run business from "for profit" institutions.

NMC

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Permalink Reply by John J Caprice on May 3, 2010 at 7:16pm

Joel,

There is an applied assumption that Universities are not making money. I think that there is substantial incomes to Private and Public Universities, that is below the surface.

In 1978 my tuition at St Johns University was about $2,000.00 per year, It is now $36,000 per year. an increase of 1800%. There is no cost justification for this increase.
Gasoline cost $1,20 per gallon in 1978 it is $3,60 a gallon now a 300% increase.
A new car was $7,200,00 it is now $42,000 an increase of 5.9%
The cost of electricity has only increase by 27%
The median household income in 1978 was $17,000 a year it is now $55,000 about a 300% increase.
Universities and Colleges pay no taxes, so there is no increase to apply.
Health care went up....but only by 185%

So,,,,what is the justification for an 1800% increase in tuition? In Private and public institutions.

When did tuition start to rise so quickly?
Why were tuitions increased so dramatically?
The business model of higher education changed some time in the 1980s....Large sums of monies from endowments and tuition became "investment vechiles.".
Follow the money and you will find that there are many billions of dollars, held in trust by private and public higher educational institutions.
You may find that all those "for-porfit" colleges are small change.
JJC

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Permalink Reply by Juan Pablo Napoli on October 3, 2010 at 10:31am

Hi Joel I think that you may change the wording of your paper, "for profit" and "non-profit" are terms used in economic classes and as some of my colleagues highlighted here, it will confuse the reader and make unclear your assumptions and goals.
Your point seems to address a common claim, but it is a bigger problem than just education.
The problem you mentioned is focused on the society model itself. When you mention that "is disease that is eating away the integrity" I would say that's a clear definition of the CAPITALISM and is eating the integrity of our societies.
Which started in US is now being adopted world wide, destroying thousands of years of social values and costumes that are struggling against the new economical model that is spreading out from a congested country to a victimized world.
Anyway, coming back to your subject, I understand Education is the key for transformation of the societies, and I believe in it it should be safe guarded the moral and ethical values that made Independence and freedom a reality.
As the constitution says "for the people and by the people" should be the message we give to our kids, the future leaders.
So in summary I believe your ideals are well oriented in general, but you should focus on something more concrete than that if you want to highlight a achievable road-map, and not sound like just another hippie claiming for governments to fight for world peace while siting in van traveling with his guitar to the beach for a get away.

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