Are universities charities? Why the 'nonprofit sector' needs to go

Tim Goral's picture
Wednesday, December 11, 2013

‘Tis the season for giving to charity. But ‘tis also the season for giving to “charity” – organizations that we consider nonprofits but whose charitable nature is not quite so clear (see Dr. Evil, on the right). Take, for example, the world of higher education: should we consider wealthy private universities like Harvard or Stanford to be part of a separate category of organizations – nonprofit corporations – that is both distinct from for-profit businesses and deserves tax-exempt status?

The universities themselves certainly think they are deserving of their special status. On Tuesday, Harvard sent out an email to its alumni (via Slate writer and Harvard alum Matt Yglesias) that read, “This Giving Tuesday – a new national initiative dedicated to extending holiday generosity to philanthropic causes – we hope that you will join other alumni in continuing Harvard’s tradition of giving back by making a gift.”

But Harvard’s philanthropy is clearly questionable. Most of Harvard’s students are rich. (For that matter, all four year nonprofit schools skew upward in the wealth distribution, although not as much as many of the most elite). Harvard itself is also really rich, with billions of dollars in its endowment and billions of dollars of property, all of which are untaxed regardless of what they’re for.

Read more »