A quick word on "Non-Profit"

[Prloko]

I've seen many schools boasting of their non-profit status. Just keep in mind that non-profit does NOT mean there is no money, or that even that they somehow break even. Non-profit just means proceeds are not payable as dividend to its owners and are not normally taxable.

For an example, below is a link to a famous non-profit, Southern New Hampshire University:

https://projects.propublica.org/nonprofi...s/20274509

As you can see, the school generated over $250 Million in revenue in 2013 with over $28 Million in Net Income, which in the corporate world is another word for profit. This goes for any non profit educational institution.

I'm not saying that there is any value judgement to be made here, but I see many students touting non-profit status to somehow mean they aren't getting fleeced, and I just wanted to remind everyone Caveat Emptor.

[Prloko]

I just wanted to add again, that in a perfect world, you want your school to have net income over expenses. This helps ensure its survival. I just wanted to clarify the way in which some non-profits are operating as for-profits but trying to play up its status.

[bjcheung77]

I've seen many schools boasting of their non-profit status. Just keep in mind that non-profit does NOT mean there is no money, or that even that they somehow break even. Non-profit just means proceeds are not payable as dividend to its owners and are not normally taxable.

For an example, below is a link to a famous non-profit, Southern New Hampshire University:

https://projects.propublica.org/nonprofi...s/20274509

As you can see, the school generated over $250 Million in revenue in 2013 with over $28 Million in Net Income, which in the corporate world is another word for profit. This goes for any non profit educational institution.

I'm not saying that there is any value judgement to be made here, but I see many students touting non-profit status to somehow mean they aren't getting fleeced, and I just wanted to remind everyone Caveat Emptor.

Hey, thanks for the info posted. I always thought and knew that non profit institutions were cheaper than the for profit ones, but didn't really research why, until this thread came up.

[High_Order1]

The same applies to hospitals.

I find it disingenuous. It sounds like they aren't making a profit. Technically that may be true in a sense, but most boards of nonprofits don't seem to be taking vows of poverty, either...

[Sagan]

I've seen many schools boasting of their non-profit status. Just keep in mind that non-profit does NOT mean there is no money, or that even that they somehow break even. Non-profit just means proceeds are not payable as dividend to its owners and are not normally taxable.

For an example, below is a link to a famous non-profit, Southern New Hampshire University:

https://projects.propublica.org/nonprofi...s/20274509

As you can see, the school generated over $250 Million in revenue in 2013 with over $28 Million in Net Income, which in the corporate world is another word for profit. This goes for any non profit educational institution.

I'm not saying that there is any value judgement to be made here, but I see many students touting non-profit status to somehow mean they aren't getting fleeced, and I just wanted to remind everyone Caveat Emptor.

Non-profit (or not-for-profit) means more than that. It also affects how they can raise money, soliciting donations and maintaining an endowment.

The profit/NFP status affects the mission of the university, too. An NFP is more likely to take on projects, programs, and other efforts that a for-profit--who's goal is to maximize shareholder/owner wealth (standard definition of any for-profit venture)--might not consider. A good way to examine this is in the programs offered by each type of school. The for-profits stick with what brings in the money.

[Prloko]

Non-profit (or not-for-profit) means more than that. It also affects how they can raise money, soliciting donations and maintaining an endowment.

The profit/NFP status affects the mission of the university, too. An NFP is more likely to take on projects, programs, and other efforts that a for-profit--who's goal is to maximize shareholder/owner wealth (standard definition of any for-profit venture)--might not consider. A good way to examine this is in the programs offered by each type of school. The for-profits stick with what brings in the money.

As my title suggests, "a quick word", which was to point out misconception that non-profit means automatic good. I want people to understand there's more to it than just that. But thanks, more info is always good. Just one comment. If you are are going to comment on my generalization with specifics (which are welcomed), then you shouldn't follow those specifics with generalized blanket statements of your own such as for-profs stick with what brings in the money. Because for profit institutions all over the world do lots of good for lots of people, especially with the latest trend toward CSR.

[cookderosa]

yes, yes, yes.

For so many years, working for a community college, I assumed that we (as an institution) took an altruistic approach to helping students and the revenue they brought in took a backseat. I was wrong.

[TrailRunr]

The same applies to hospitals.

I find it disingenuous. It sounds like they aren't making a profit. Technically that may be true in a sense, but most boards of nonprofits don't seem to be taking vows of poverty, either...

It gets worse. You can apply this to big HMO groups that own everything.

Let me give you one of the worst examples: Kaiser Permanente, which is the University of Phoenix equivalent quality in healthcare

the physician group is for-profit
the hospital group is non-profit
the insurance group is non-profit

Kaiser claims it is non-profit, but that's pretty much fiction.

In order for the physician group to maximize profit, they cut costs in everything else including patient care, jack up the premiums, and collect federal subsidies including ACA and Medicare. They are a leading ACO, which is actually bad news for patients. If you're with Kaiser, I would suggest you never get sick and don't get sucked in by the convenience of Kaiser's pharmacy, doc, and labs all at the same place. McDonald's is convenient too, but it's also just as bad for your health as Kaiser. Kaiser makes a ton of money at your expense.

[jsd]

I've had a number of different insurance companies over the years through my employer. Kaiser has been by far the best coverage and care that I've received.

I know that that's not going to be everyone's experience, but I'd pay considerably more for Kaiser to never deal with other companies again. As it turns out, KP is the more affordable plan through my employer, so win-win.

[Tim D]

Hey, thanks for the info posted. I always thought and knew that non profit institutions were cheaper than the for profit ones, but didn't really research why, until this thread came up.

That is sometimes the case, not always the case. For example, If I was to compare the tuition of the non-profit SNHU VS. the for-profit APUS . Of course, there are many differences between the schools but the point is the generalizations are not completely accurate.