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Comment by Dowwie | Hacker News Reader

Bankruptcy isn't a bad idea for universities. They're not supposed to be for-profit corporations, although many have run them as such. Bankruptcy could help schools restructure their operations, but that requires that boards of directors haven't been captured by financial interests.

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> Bankruptcy isn't a bad idea for universities.

It's important to note that the way university finances / endowments are structured, as well as the demands of alumni make it so that bankruptcy isn't really that simple in higher ed. [0]

> They're not supposed to be for-profit corporations

I suspect that you don't totally grasp the non-profit vs for-profit distinction. The essential difference between a for-profit and a non-profit is simply that non-profits re-invest their profits into the organization rather than distributing those profits to shareholders. The original intent of this structure was to facilitate philanthropic endeavors (which have pretty much always been self-serving in some subtle way), but just because a non-profit corporation isn't associated with some obvious social benefit doesn't make it any less of a non-profit if it doesn't have shareholders.

It's not always obvious, but Rolex and Ikea are both structured as non-profits (with some for-profit subsidiaries iirc).

[0] https://en.wikipedia.org/wiki/Sweet_Briar_College#2015_closu...

Yes, non profit, not for profit, profit, it’s all just useful for tax evasion and obscuring information.

> The essential difference between a for-profit and a non-profit is simply that non-profits re-invest their profits into the organization rather than distributing those profits to shareholders

They can't distribute to shareholders, but they aren't required to reinvest. What exactly they can do, with profits or more generally, depends on the specific class of nonprofit they are.

Didn't know that, but admittedly even my notions of how non-profits are structured is only slightly deeper than the popular notion of what non-profits are supposed to be. I mostly just wish we'd all disabuse ourselves of the notion that non-profits are always meant to promote some greater social cause. Firsthand experience tells me that the statement "non-profit == good, for-profit == evil" doesn't always hold up.

> I mostly just wish we'd all disabuse ourselves of the notion that non-profits are always meant to promote some greater social cause.

There are classes of nonprofits for which this is not true (the NFL, for instance, is one example of a nonprofit for which that is not true), sure, but most of the cases where this comes up about US nonprofits the focus is usually on specifically 501(c)3 charities for which this is specifically, by law, true, as they must be organized and operated for some combination of a specific enumerated list of purposes deemed socially desirable, which is the whole reason that not only are the organizations themselves tax exempt, but donations to them are tax deductible. Relevant to this conversation, that's absolutely the norm for nonprofit institutions of higher education.

I'll admit my ignorance about the details, but I do stand by my belief that non-profits are not always necessarily beneficial for society- I don't think that's particularly controversial. In many cases, there's a substantial gap between "deemed beneficial" and actually beneficial that most people don't grasp because they've been indoctrinated to believe that non-profits can do no wrong. More discerning folks will pore over 990s and ratings on Charity Navigator.

> I do stand by my belief that non-profits are not always necessarily beneficial for society

That's a fairly non-controversial claim (even regarding specifically 501c3 orgs), but something being actually “beneficial to society” is not the same thing as it being “meant to promote some greater social cause.”

In practice, this is an extraordinarily delicate and dangerous process.

Suppose you are a CS professor at the sort of no-name university that this article is talking about.

Odds are, you're more than qualified for a lot of industry roles (and have former students who would hire you on without blinking). Also, those industry roles have much higher salaries than your teaching gig. However, you stay at No-Name U. because it's a pleasant life and you enjoy teaching.

Then admin comes along and chops half your tenured colleagues. Suddenly, No Name U. is a hellish place to work. Time to leave.

Now multiply that across all of the faculties that have private sector options.

Now notice that those are exactly the majors that are difficult to recruit faculty for in the first place [1] and, moreover, are exactly majors that students are interested in these days.

That's the risk. At universities, cutting back means firing people. And firing people means low morale. And low morale means losing exactly the people who were going to power your turn-around story.

[1] https://cra.org/articles-addressing-shortage-of-cs-professor...

> They're not supposed to be for-profit corporations, although many have run them as such.

Can you explain a bit about why you believe that? I could imagine different parties having different goals for the same institution.

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