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One thing I don't understand - if these universities are: 1. Running at a profit (growing endowments) 2. A path to the middle class Why doesn't the government
by obblekk 9y ago
One thing I don't understand - if these universities are:
1. Running at a profit (growing endowments)
2. A path to the middle class
Why doesn't the government just roll the profits from the current pool of public uni's to new public uni's until prices start falling and demand is satisfied? Seems like it could only be good for society?
- whatshisface 9y agoThat sounds like it would destroy the incentive to do a good job in the first place (and the incentive to donate/make endowments to your alma matter, why bother when that money will just be taken away?). Instead, why don't these univiersities roll their own money into expansion?
- akhilcacharya 9y agoI'm still not sure why people donate either.
- IncRnd 9y agoPeople donate through what are known as charitable gift annuities. It's a tax minimization and income strategy.
- akhilcacharya 9y agoDoes that actually work? You're still parting with $X after all.
- twblalock 9y agoYes, it works. There are a lot of ways to use charities, trusts, and similar things to avoid taxes.
- twblalock 9y agoPlus they can get their name on a campus building.
- mulmen 9y agoI donate so other students can have the same benefits I had.
- maxerickson 9y agoEndowment funds are usually given with a specific purpose attached. There's no legal mechanism for government to seize them.
- jdale27 9y agoPublic universities are not profitable. Quite the opposite: tuition and fees cover only part of their operating costs; the rest comes from the government. In California, AFAIK, public universities don’t have endowments. Government funding of universities is seen as an investment in the state’s economy and in greater opportunity for all Californians. That’s the story at least. Theoretically they should be self-sustaining on the large scale: education -> greater economic output -> higher tax revenue -> funding for education. Unfortunately that hasn’t really proven to be sustainable in California for a variety of reasons.
- ebikelaw 9y agoThe other way to look at it is that state universities are ludicrously profitable, but the boundaries are drawn in the wrong place.
- kccqzy 9y agoCan you explain what you mean? What kind of boundaries are you referring to?
- ebikelaw 9y agoWhat I meant was profit/loss and other systems of accounting are meant to sum up the quantities within and the flows across the boundaries of a given system. If you externalize all of the profit and internalize all of the cost then of course it's going to look like a university loses money.
- skosuri 9y agoUC's have an endowment (~$10B), and for UCLA (where I work), the state funds contribute to about 6% of revenues. Tuition is only about 10%.
- kenhwang 9y agoDidn't realize how close the UCs were to being essentially private universities these days. No wonder they're targeting higher percentages of out of state enrollments.