4 ms·

I think a lot of people work with an assumption that the non-profit colleges at least have pure motives, so they may fall short on execution but they're trying.

by jbooth 16y ago

I think a lot of people work with an assumption that the non-profit colleges at least have pure motives, so they may fall short on execution but they're trying. For profit, on the other hand, I have no problem with capitalism but the incentives in the low-income-education market point pretty clearly to "crank out as many degrees as possible with more emphasis on marketing the degree than making it good". Butts in chairs and all that, if you want to make money. EDIT: Although, I'd love to be proven wrong. Cheap vocational training where the school turns a profit would really be a great system. I'm just concerned that the priorities will have to be 1) attract lots of students, 2) cut costs per student, 3) deliver education, in that order, if your organization's goal is profit rather than education.

anamax 16y ago
> if your organization's goal is profit rather than education. The organization's goal isn't all that relevant compared to the results produced by the folks actually doing the work. Heck, their goals matter more than the organization's goals. For example, a non-profit can easily be staffed by folks looking to just slide by. Remember - they're being paid just like the folks at the for-profit down the street. Non-profit is merely a tax and investor-return status. That tells you nothing about what the organization actually does.
- jbooth 16y ago
  I disagree, profit vs non-profit is your raison d'etre and it affects all of your decision making, particularly the topline variety. Say you're writing the FY2012 budget right now for your moderately successful for-profit degree program. You have an extra 10k. Do you spend it on better lab equipment or on subway ads? Subway ads would seem to be the more profitable choice a lot of the time. Actually, while we're at it, if we have a choice between an excellent and a mediocre professor, why don't we take the mediocre guy for less money and spend the difference on marketing? That's a sound business decision, because it will lead to more profit. Now, maybe your consumer market will be so discerning as to punish schools who make decisions like this in the long run, but I'm not convinced they will.. good marketing can beat a good product in many industries and especially in something as hazily defined as education. Doubly so when you have customers who just want "a degree", take a look at Western New England University sometime if you want to see the definition of a paper mill. Their entire degree program is cops getting their masters for the contracted pay bump.. the emphasis is very much not on learning. Again, I'd love to be wrong.. but can you really not see these incentives at work here?
  - yummyfajitas 16y ago
    Why do you feel non-profits don't make the same choices? Instead of spending an extra $100k on better lab equipment, they might spend it on empire building. If an administrator has 12 people under him rather than 10, it gives him a better case for a pay raise and makes him feel more important. Spending the money on marketing increases enrollment, and reduces the chance of layoffs/pay cuts. (This phenomenon also occurs at for-profit companies, but the profit motive of shareholders can sometimes reign it in, e.g. the Gordon Gekko investor. Sometimes it can't, as in the case of GM or MS.)
  - anamax 16y ago
    > Again, I'd love to be wrong.. but can you really not see these incentives at work here? You're ignoring the incentives of the people involved. Employee behavior is not determined by whether capital costs are being repaid from revenues. Take your example, higher education. Do you really think that the money goes to the classroom?
  - anamax 16y ago
    > Actually, while we're at it, if we have a choice between an excellent and a mediocre professor, why don't we take the mediocre guy for less money and spend the difference on marketing? That's a sound business decision, because it will lead to more profit. Profit is at most 10% of revenues. Why do you assume that that 10% has more effect than the 90% that goes to expenses? In fact, non-profits are notoriously lax wrt expenses. They often cost more to deliver the same services. Which reminds me, why are you assuming that it's better to spend 2x as much on an "excellent" professor? Sure, it's great for the folks in her class, but what about the folks who don't get to take a class because you spent all your money on excellence? Or, if you like, what about the folks who can't afford that class because you spent so much on the professor.
yummyfajitas 16y ago
I think a lot of people work with an assumption that the non-profit colleges at least have pure motives, so they may fall short on execution but they're trying. This fallacy (what I sometimes call the "non-profit fallacy") is certainly being exploited by the people looking to harm for-profits. But make no mistake - it is a fallacy. Non-profits want money just as much as for-profits - the only difference is that the money is distributed as salaries to employees (particularly the bloated administrations) rather than as profits to shareholders. Institutional incentives matter far more than the explicit corporate charter.
- jbooth 16y ago
  Eh, I'd say that it affects decisions at the topline more. Empire building happens everywhere, but if the attitude at the top is "we're here to make it rain" vs "we're here with a holy mission to educate", then that permeates everything.
- joe_the_user 16y ago
  This fallacy (what I sometimes call the "non-profit fallacy") is certainly being exploited by the people looking to harm for-profits. In another part of this thread, you essentially admit the point that for-profits are engaging in a massively fraud against the Federal government as selling garbage degrees. So the problem with "harming" these shysters is what? That you don't want this to be specific to for-profit education institutions. Fair enough but any effort to "harm" this group would essentially involve reigning any college's ability to print federal government dollars. Is there a problem that rather pressing concern?
  - yummyfajitas 16y ago
    I didn't essentially admit the point, I strongly agree with it. I'm just trying to put the idea out there that we shouldn't limit our attention to for-profits. I'm sure some for-profits do a good job, and I'm sure many non-profits don't. I suspect the majority of crappy schools are non-profits, simply because most colleges are non-profits. I strongly favor reigning in all crappy schools, I merely oppose limiting our efforts to for-profits.

by jbooth 16y ago

anamax 16y ago

> if your organization's goal is profit rather than education. The organization's goal isn't all that relevant compared to the results produced by the folks actually doing the work. Heck, their goals matter more than the organization's goals. For example, a non-profit can easily be staffed by folks looking to just slide by. Remember - they're being paid just like the folks at the for-profit down the street. Non-profit is merely a tax and investor-return status. That tells you nothing about what the organization actually does.

jbooth 16y ago
I disagree, profit vs non-profit is your raison d'etre and it affects all of your decision making, particularly the topline variety. Say you're writing the FY2012 budget right now for your moderately successful for-profit degree program. You have an extra 10k. Do you spend it on better lab equipment or on subway ads? Subway ads would seem to be the more profitable choice a lot of the time. Actually, while we're at it, if we have a choice between an excellent and a mediocre professor, why don't we take the mediocre guy for less money and spend the difference on marketing? That's a sound business decision, because it will lead to more profit. Now, maybe your consumer market will be so discerning as to punish schools who make decisions like this in the long run, but I'm not convinced they will.. good marketing can beat a good product in many industries and especially in something as hazily defined as education. Doubly so when you have customers who just want "a degree", take a look at Western New England University sometime if you want to see the definition of a paper mill. Their entire degree program is cops getting their masters for the contracted pay bump.. the emphasis is very much not on learning. Again, I'd love to be wrong.. but can you really not see these incentives at work here?
- yummyfajitas 16y ago
  Why do you feel non-profits don't make the same choices? Instead of spending an extra $100k on better lab equipment, they might spend it on empire building. If an administrator has 12 people under him rather than 10, it gives him a better case for a pay raise and makes him feel more important. Spending the money on marketing increases enrollment, and reduces the chance of layoffs/pay cuts. (This phenomenon also occurs at for-profit companies, but the profit motive of shareholders can sometimes reign it in, e.g. the Gordon Gekko investor. Sometimes it can't, as in the case of GM or MS.)
- anamax 16y ago
  > Again, I'd love to be wrong.. but can you really not see these incentives at work here? You're ignoring the incentives of the people involved. Employee behavior is not determined by whether capital costs are being repaid from revenues. Take your example, higher education. Do you really think that the money goes to the classroom?
- anamax 16y ago
  > Actually, while we're at it, if we have a choice between an excellent and a mediocre professor, why don't we take the mediocre guy for less money and spend the difference on marketing? That's a sound business decision, because it will lead to more profit. Profit is at most 10% of revenues. Why do you assume that that 10% has more effect than the 90% that goes to expenses? In fact, non-profits are notoriously lax wrt expenses. They often cost more to deliver the same services. Which reminds me, why are you assuming that it's better to spend 2x as much on an "excellent" professor? Sure, it's great for the folks in her class, but what about the folks who don't get to take a class because you spent all your money on excellence? Or, if you like, what about the folks who can't afford that class because you spent so much on the professor.

yummyfajitas 16y ago

I think a lot of people work with an assumption that the non-profit colleges at least have pure motives, so they may fall short on execution but they're trying. This fallacy (what I sometimes call the "non-profit fallacy") is certainly being exploited by the people looking to harm for-profits. But make no mistake - it is a fallacy. Non-profits want money just as much as for-profits - the only difference is that the money is distributed as salaries to employees (particularly the bloated administrations) rather than as profits to shareholders. Institutional incentives matter far more than the explicit corporate charter.

jbooth 16y ago
Eh, I'd say that it affects decisions at the topline more. Empire building happens everywhere, but if the attitude at the top is "we're here to make it rain" vs "we're here with a holy mission to educate", then that permeates everything.
joe_the_user 16y ago
This fallacy (what I sometimes call the "non-profit fallacy") is certainly being exploited by the people looking to harm for-profits. In another part of this thread, you essentially admit the point that for-profits are engaging in a massively fraud against the Federal government as selling garbage degrees. So the problem with "harming" these shysters is what? That you don't want this to be specific to for-profit education institutions. Fair enough but any effort to "harm" this group would essentially involve reigning any college's ability to print federal government dollars. Is there a problem that rather pressing concern?
- yummyfajitas 16y ago
  I didn't essentially admit the point, I strongly agree with it. I'm just trying to put the idea out there that we shouldn't limit our attention to for-profits. I'm sure some for-profits do a good job, and I'm sure many non-profits don't. I suspect the majority of crappy schools are non-profits, simply because most colleges are non-profits. I strongly favor reigning in all crappy schools, I merely oppose limiting our efforts to for-profits.