Profitable Nonprofits

Aug 17, 2011 |  George Leef

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Profitable Nonprofits

Aug 17, 2011 | 

George Leef

In today’s Pope Center Clarion Call, I comment on the recent paper by Professor Vance Fried, “Federal Higher Education Policy and the Profitable Nonprofits.” His argument is that nonprofit colleges act like profit-making enterprises, but they simply spend their excess revenues in ways that keep the people in and around them happy — the faculty and administrators primarily. That leads to needlessly high costs and inefficient use of resources. Market competition usually squeezes out inefficiency and excess profits, but the market for higher education is not very competitive due to barriers to entry and government subsidies.


| August 17, 2011 - 1:28 PM

Vance Fried thinks that universities shouldn’t do research and that they squander and rake off the “profits” from their operations on overpaid, underworked faculty and administrators. Vance Fried thinks that a top-notch college education should cost about $8000/yr.  Now, this Vance Fried appears to have a chaired position in “Entrepreneurship” at Oklahoma State University.  And the blog post is about—a research paper! (one of a series) by—Professor Fried!  I’ll bet that many a musicology or even many a physics professor toils for a lot less than Vance Fried, doing their worthless research and teaching their arcane subjects.  I doubt that you rack up many student credit hours teaching late Beethoven or relativity, even in Stillwater.  (Now, the Boone Pickens mega-subsidy of OSU athletics is a real bone to pick!) 

Perhaps they will make Vance Fried president of one of the several Oklahoma public colleges that do little or no research, and he will show how to create the low-budget academic citadel on the prairie. 

And when it comes to administrators—the efficient and brutal for-profit private sector still outpays their CEOs by a factor of something like 50, last time I looked, and maybe 500, if you count everything properly. (Perhaps some research from the Accounting department at Oklahoma State would be enlightening!) 

Where is the looting going on?