The reality is exactly the opposite: the for-profit sector is challenging a centuries-old practice of separating philanthropy from business.
Since the Elizabethan statute of charitable uses in 1601, Anglo-American law has sought to encourage charitable giving to promote the common good. The idea behind modern philanthropy is that nonprofits undertake services that are either inappropriate for market activity or would not be supported by the market. To ensure that these goods are provided, the state both provides them itself through public institutions and offers private nonprofits legal privileges (such as incorporation) and economic incentives (such as tax benefits).
In 1874, Massachusetts passed one of the earliest general laws exempting from taxation any “educational, charitable, benevolent, or religious” institution. Believing that citizens, not just the state, should promote the common good, Massachusetts sought to encourage citizens to devote their money to institutions that would serve the public. Implicit was the assumption that certain kinds of activities — educational, charitable, benevolent, and religious activities in particular — should be done as a service and not for a profit. Massachusetts’ law became a model for other states.
In the modern era, tax incentives are one of the primary ways in which the state encourages nonprofit institutions, whether churches, local grassroots associations, large endowed philanthropies, or universities. The state also subsidizes nonprofits that serve the community, especially in social services and education. As Olivier Zunz has demonstrated in his recent book Philanthropy in America, Americans have not only given generously but benefited greatly from philanthropy.
This is not to suggest that the history of American philanthropy is without conflict. After the American Revolution, many Americans worried about what Anglo-Americans called the “dead hand of the past.” Thomas Jefferson was among them. He believed that permanent endowments enabled one generation to influence the affairs of the next in ways that threatened democracy. “The earth belongs in usufruct to the living; . . . [and] the dead have neither powers nor rights over it,” proclaimed Jefferson in 1789.
These questions re-emerged in the 20th century. Many Americans reacted with great concern when Andrew Carnegie and others used their wealth to engage in philanthropic endeavors that some opposed. During the Cold War, foundation-sponsored research led some policymakers to question foundations’ power and political agenda. Similar concerns can be raised about the Gates Foundation today. Private philanthropies’ wealth may give them undue influence in public deliberation. Philanthropy, no less than business, requires regulation.
Moreover, public and nonprofit institutions become corrupted when profit becomes their goal rather than a means to fulfilling their mission. This has happened to some extent in American universities that invest in tangentially related programs like big-time sports. Since the passage of the Bayh-Dole Act (1980), which permitted universities to profit from publicly funded research, universities have encouraged marketable rather than socially beneficial science. Moreover, in an era of state defunding, many policy makers are urging universities to act more like businesses, even when doing so perverts their mission and institutional culture.
The state must ensure that both public and nonprofit institutions remain true to their civic mission in return for the legal and financial benefits they receive. This point was made recently by Robert Zemsky, a member of President George W. Bush’s Spellings Commission. In Making Reform Work, Zemsky urges colleges to talk constantly “about purposes, about ends rather than means,” to hold fast against the temptations of profit.
Whether colleges are for-profit or not matters a lot. It affects their mission, their culture, their labor practices and, most important, the lessons they offer students. For-profit education implies that education is a commodity bought for the advantage it provides. It makes no pretense that service is a necessary part of being a college graduate. In fact, even if it did, students are too smart to believe it. They know what they are buying -- a degree from a vendor. We expect businesses to make money, but we do not want our churches and schools to treat us as consumers but as congregants and students.
For-profits must be regulated as businesses. They are not charities, despite being subsidized heavily by public student loan dollars. In reality, in return for these public subsidies, for-profits should live by the same rules as other nonprofits. They should make the common good their primary goal and reinvest all revenue to fulfill their mission. They will not, however, because, as Kevin Kinser argues in From Main Street to Wall Street, they exist to generate wealth for investors and shareholders. As recent scandals have made clear, for-profit institutions in higher education, like other Wall Street businesses, too often put their bottom line ahead of the common good.
For-profit higher education’s advocates are declaring war on American philanthropy. They seek to profit off of charity, transforming what should be a service into another way to gain wealth. They threaten a distinction that has deep roots in American history and law. They suggest that all goods -- including education, charity, and religion -- should be commodities. History and common sense tell us otherwise. While the line between the for-profit and nonprofit sectors can be blurry at times, the differences between them are very real, of moral significance, and worthy of protection.
It's no secret that the community college sector and the completion agenda in particular, derived in large part from the American Graduation Initiative (AGI), have gotten a lot of attention recently. It's inarguable that we need an educated citizenry and that community colleges have a significant role to play in educating our workforce. Full federal funding didn’t follow the ideas in AGI, but the basic premise of certificate and degree completion as a primary measure of student success has gained ground among our federal and state leaders, and among private foundations. The goal of performance based accountability measures is laudable, as is identifying appropriate metrics to benchmark both institutional effectiveness and student success.
There are, though, a few caveats to consider seriously. There is an assumption that community colleges can be more efficient in these austere times and, at the same time, provide the growing number of services our students deserve, and that we can increase student success rates without compromising open access. Further, a narrow definition of student success as degree or certificate completion discounts the myriad of reasons beyond a goal of graduation that students attend community colleges.
The American Association of Community Colleges' Voluntary Framework of Accountability defines multiple measures and practices that lead to student success. Other organizations have sought to define student success through a more limited and prescribed lens. For instance, Complete College America (CCA) is benchmarking awards granted as a primary metric for community college students. However, when considering certificate awards they have chosen to count only those certificates of 30 hours or more. Futureworks, commissioned by CCA to produce "Certificates Count: An Analysis of Sub-baccalaureate Certificates," recommends that "short-term programs that lack significant labor-market payoffs should be discouraged" based on their analysis of available data. The organization carries this too far, however, in that the core metrics of CCA exclude the short-term certificates (less than 30 hours) that in many cases meet academic standards and local labor market needs very effectively.
It is this benchmarking of 30-hour certificate awards and the besmirching the lesser credit hour certificates or courses that meet local or regional needs that concerns me. If state leaders and foundations are influenced by reports such as the one produced by Futureworks, and they evaluate our performance on these narrowly defined benchmarks, I fear that our local constituents and economies will not be well-served, and our students may be denied a viable educational starting point. In many cases short-term certificates provide access to job credentials that lead to a sustainable wage, with a curriculum agreed upon by faculty and business leaders. We would be doing our students a disservice by needlessly raising the floor for credentials.
In Connecticut, the fastest growing occupations are middle-skilled jobs. For many such jobs, a short-term certificate is the credential of choice by the employer. At my college, short-term certificates account for 60 percent of students enrolled in certificate programs, and 10 percent of all awards. For example, we offer short-term certificates in computer aided drafting of 15 credits in lean manufacturing of 6 credits and a 600-hour precision machining program in which a student can earn 12 credit hours towards a credit certificate or degree. These certificates provide students with access to a robust job market in manufacturing, and a sustainable wage. Short-term certificates for medical insurance specialists (22 credits) and paralegals (29 credits) do the same in their fields. Students who respond to program graduate surveys report being employed in their field, including 75 percent for recent grads of our precision-machining program, and 90 percent for a recent class of students earning paralegal certificates.
I think we can agree with Futureworks that the longer-term certificate options designed by faculty and advisory boards to meet certain employment needs may indeed provide a higher wage for workers, but the corollary isn’t that short-term certificates don't accomplish a similar goal or that they shouldn’t be counted and benchmarked; they should be embraced for the advantages they provide our students and our communities. Aren’t our program advisory committee members and our local employers the most knowledgeable in helping our colleges determine the types of programs we offer? According to the CEO of Whitcraft LLC, “We are here [in Connecticut] because of the highly skilled aerospace manufacturing workforce in the region." Or the president of Highland Manufacturing, who believes "MCC has played a vital role in the development of new and creative talent for our company."
Clearly, community colleges need to form partnerships with local and regional economic development agencies to ensure we have the programs, funding, space and equipment that produce students who have the skills and intellectual acumen -- forget whether that’s a degree or certificate for a moment -- that are needed to keep this fragile economy going, to ensure that families have sustainable incomes, and that education doesn’t become victim to thoughts of discretionary spending.
Frankly, no matter what the assessment of the aggregate national data, I’m going with whatever is most necessary to support my local community, and my programs will be implemented with academic integrity and rigor whether it’s one course, a certificate of any length, or an associate degree.
Gena Glickman is president of Manchester Community College.