In the Shadow of the Ivory Tower by Davarian L. Baldwin is a wake-up call to the reality that higher education is no longer the public good it was once thought to be.
Then: in many cities, wealthier populations fled for suburbs after WWII, leaving behind poorer classes, particularly (since folks rather concentrate on race these days) Black and brown dwellers, and a core of “meds and eds.” In the 1990s, this trend began to reverse, as young professionals begin seeking urban experiences, rejecting their suburbanite parents. The urban university—from which these knowledge professionals emerged—became the core for expanded amenities that are sold today as a desirable urban lifestyle.
Now: Urban universities play an outsized role in US cities. On the plus side, they bring diverse ideas and people together and they generate new innovations. But in case study after study, Professor Baldwin shows how they also gentrify neighborhoods and exacerbate housing inequality in an effort to enrich their campuses and attract students. In addition, they maintain private police forces that target the Black and Latinx neighborhoods nearby. They also become the primary employers, dictating labor practices and suppressing wages.
Urban development is a growth strategy, a “for profit” reality couched in an ideology of “promoting the public good,” and the development of what Professor Baldwin calls UniverCities. In a '“knowledge economy” these are the new company towns.
While higher education delivers positive community outcomes, the definition of community stops outside its cloistered borders, to the detriment of its poorer—often Black or brown—residents, sometimes pushing them away using the state power of eminent domain. Poorer residents return only through low-wage sectors of higher education, not administrators but janitors, cooks, groundskeepers, etc.
A critical key: universities use their “non profit” status to avoid taxes, enabling the transfer of public dollars into private developments with little oversight. Meanwhile, they benefit from public services like policing and fire protections, snow removal, road maintenance, trash removal, all without paying for them—a huge subsidy.
Donor gifts are tax deductible. Investment income is tax free.
In economic reality, nonprofits are self-serving entities that exist to perpetuate their funding and the jobs of their workers, and expanding those workers. One example: over the last two decades, the number of administrators that Yale employs has risen three times faster than the undergraduate student body, according to University financial reports. In 2003, when 5,307 undergraduate students studied on campus, the University employed 3,500 administrators and managers. In 2019, before the COVID-19 pandemic’s effects on student enrollment, only 600 more students were living and studying at Yale, yet the number of administrators had risen by more than 1,500 — a nearly 45 percent hike. In 2018, The Chronicle of Higher Education found that Yale had the highest manager-to-student ratio of any Ivy League university, and the fifth highest in the nation among four-year private colleges.
In sum, the nonprofit industrial complex is not in the business of selfless altruism. It’s the nature of systems. Sometimes nonprofits do a lot of good along the way, despite the graft and the self-dealing, and it can make sense to donate to them for this reason.
All this amounts to a competitive edge over similar industries, like biotech or property development or management, which still pay taxes.
Case studies detail how this edge plays out in New York, Chicago, Phoenix, and other cities.
Think about it next time you’re asked to support or donate to your local hedge fund.
Notes
https://internet3.trincoll.edu/facProfiles/Default.aspx?fid=1361623
https://yaledailynews.com/blog/2021/11/10/reluctance-on-the-part-of-its-leadership-to-lead-yales-administration-increases-by-nearly-50-percent/