Business Insider has compiled a list of the 20 biggest money makers in college sports. Here they are in descending order:
Hey, Paradise City University made it into the top 20! Whoo hoo!!!
These ‘schools’ are all making more than $94 million per year from sports. That doesn’t include the revenues that they generate from their endowment funds, or the amount of tax money that they receive from their state governments ($243 million for PCU in 2013-2014). Meanwhile, tuition rates have skyrocketed and students are taking out student loans to pay for their ‘education‘.
Oh, and these ‘schools’ are technically non-profit organizations. So they aren’t paying any taxes on even a penny of that revenue:
The idea that nonprofits do not make profits is only true in the narrowest understanding of the term. Nonprofits can and do make profits, but they cannot give them to owners or shareholders like a for-profit corporation can. “Contrary to their name, nonprofit organizations can be and often are highly profitable,” notes a report from the Institute for Research on Poverty. “They are restricted not in how much income they can generate, but rather in how it is distributed. Profit cannot be paid out to owners or anyone else associated with the organization: it must be devoted to the tax-exempt purpose of the organization.”
Let me provide a real-world example of this in practice. On Tuesday, the same day Harvard emailed its alumni, Stanford called me to ask for money. I politely declined, explaining that I preferred to give my money elsewhere. But there’s a script, and I didn’t want to throw the other actors for a loop by improvising too early (you are welcome, former drama teachers). So we continued. First, I was instructed that my donation would go directly to financial aid. I explained that while this is technically true, it is functionally false. Because Stanford’s endowment is so large, my donation would mostly allow the school to reallocate money from its endowment that would otherwise go to financial aid to some other “less charitable” purpose. Second, I was instructed that my donation could also go to help student groups. I repeated that my first argument still held. Third, I was instructed that even if I donated $1 it would be important because it would help Stanford rise in the U.S. News and World Report college rankings, and “Stanford is currently fifth but we want to be the best at everything.”
In the words of Scooby Doo, who is the president and CEO of a local mystery-solving nonprofit, “Ruh roh!”
That donation script is very telling: the university is explicitly acknowledging that its goal in bringing in more money is not “education” (whatever that means) but the zero-sum growth of the power and prestige of the university.
College. The greatest scam ever.