Legally, the distinction between for-profit institutions and not-for-profit ones finds its origins in our tax code. Organizations seek non-profit status because they want special tax benefits and in return they must agree to abide by certain rules. (See my post for last week, for instance, on the restrictions on political speech by church leaders.)
But I have begun to fear that saying an organization is non-profit has also taken on a moral meaning beyond the legal one. Nonprofits are organizations that we can somehow all agree are working in the public good. And those for-profit institutions, they are just operating for themselves. You see how this distinction plays out in the debate over for-profit education. The for-profit schools have to prove their worth, prove that they are getting students jobs or doing something useful, whereas it goes without saying that non-profit educational institutions are doing just that. Journalists regularly use the for-profit/nonprofit distinction when deciding which sources are worth quoting and which ones must be surrounded by heavy qualifications.
It is bad enough, in my opinion, that entrepreneurs and businessmen regularly get counted out of public discussions because they are only interested in their own bottom lines (which, of course, in this line of thinking, have nothing whatever to do with other people's bottom lines, job prospects, etc.). But what really gets me is that nonprofit institutions seem to use their own tax status to cover up their own interests.
In a long piece in the current issue of the Atlantic, Taylor Branch examines the college sports industry. I call it an industry despite the fact, of course, that both the NCAA and all of the colleges involved are non-profit institutions:
With so many people paying for tickets and watching on television, college sports has become Very Big Business. According to various reports, the football teams at Texas, Florida, Georgia, Michigan, and Penn State—to name just a few big-revenue football schools—each earn between $40 million and $80 million in profits a year, even after paying coaches multimillion-dollar salaries. When you combine so much money with such high, almost tribal, stakes—football boosters are famously rabid in their zeal to have their alma mater win—corruption is likely to follow.
Probably, but corruption would be less likely to follow if we actually allowed college athletes to get paid a decent salary for the hard work they are doing. Even for someone who has followed for a number of years how few college athletes get a decent education and how few prospects they have after graduation if they don't make it into professional sports, Branch's piece will be eye-opening. College athletes who suffer life-threatening injuries and get no compensation for the risks they have taken. College athletes who don't have enough money to take a bus home are punished for selling items with their own names. Even after they have graduated, colleges claim the rights to these students' names and images.
For decades, colleges have sailed under this slogan of bringing up student-athletes. Branch, who is by no means a free-market conservative from what I understand, thinks the only solution is to pay these athletes. After reading his piece, I don't think it's a stretch to compare the college athletics system to some kind of post-civil war tenant farmer system (though I might not go as far as Branch does with the slavery comparison.) Would reform of college athletics threaten the NCAA's nonprofit status? Of course. What would it do to colleges and their coaches tax bills? Who knows? Who cares?
It's time to stop using the word nonprofit as synonym for compassionate when it clearly does not apply.