Grand Canyon University (GCU), a for-profit university based in Phoenix with over 35,000 undergraduate and 20,000 graduate students, is considering converting to nonprofit status. Personally, I hope it makes the move even though I have qualms about nonprofits generally.
In my ideal world, there wouldn’t be any for-profits in the fields of health care and education. Yet, as we know, health care is dominated by for-profit enterprises. In fact, many for-profits have taken over nonprofit operations over the past couple of decades. The reason is simple: nonprofits often make lousy managers. Frequently, their operations are highly inefficient, costly and antiquated. Without the financial and operating discipline imposed by competition and the profit motive, there seems to be insufficient incentives for adequate cost control and operational efficiency. But I still don’t like it.
In the world of health care, there are some world-class nonprofit hospitals, including the Mayo Clinic, Geisinger Medical Center and others. It proves nonprofits can excel. We see the same thing in higher education, although as with nonprofit health systems, their success is made possible only by massive taxpayer subsidies.
Interestingly, we haven’t seen the same movement in higher ed as we have in health care. To the contrary, there is a lot of pressure on for-profit colleges, particularly on the part of the Obama Administration. More often than not, the criticism is justified. Too often (but not always), the for-profits demonstrate insufficient concern for learning and their students’ debt levels.
But, of course, it’s only a matter of degree. Many (if not most) nonprofit colleges also demonstrate insufficient concern for student learning and debt, although they (including the so-called private colleges, which should be more appropriately called quasi-public colleges) have the major advantage of being recipients of public subsidies, thereby helping to keep student debt levels down.
As millionaire presidents of nonprofit universities can tell you, and is evident from the lucrative professional sports programs run by major nonprofit universities, there is plenty of profit to be made in the world of nonprofit education. You don’t have to maintain for-profit status to make those who run the institutions rich. (Nonprofit health care systems spin out even more multi-millionaires.)
As I said, in my ideal world all hospitals and schools would be not-for-profit. And they’d all be obsessed with learning and delivering the best possible services and experience to their clientele (patients and students) in an efficient, affordable manner. Perhaps if all the for-profits would convert to nonprofit status, we’d have one less distraction keeping us from the task of reforming many of the nonprofits.
If the for-profits convert, I do hope the nonprofits will pick up the slack in serving the nontraditional student (working adult, veteran, etc.). Many nonprofits only want to serve traditional students. Many have expanded their missions and provide programs designed to serve the nontraditional student, but in many areas these nontraditional students are dependent upon the for-profit sector. Let’s hope that changes.