Conrad Bastable

Hey Conrad, excellent essay, I really enjoyed it. I think I'm missing something. If MIT doesn't need the money from tuition, why not just make tuition $0 and get the PR benefit?

No, the point of it was that it has to be unaffordable

Exactly this. PR benefits are awesome, but they don't keep your Investment Returns tax-free. That said, a handful of elite private institutions are already in a position to offer $0 Tuition. Food for thought there on social dynamics of Harvard = $0, State = $50,000

Sorry, let me rephrase that. Why not make it unaffordable to over 50% for the Justice Department but make a charitable gift to 99% of them for the PR? Do you think that wouldn't hold up in court?

Ah I understand, thanks for rephrase. Practically: Endowments not really large enough in many places Reality: Still, with some cutting of Admin fat, could be achieved Rephrase: Why is Financial Aid so low today? One answer: My Bermuda Triangle Essay => Wealth worth more than PR

Another answer: the actual PR of giving middle class America & upper middle class America charity/aid would achieve the opposite PR effect of what you suggest i.e. 1/3rd of MIT is already on a full-ride Do you get good PR for giving a 2-income 2-FT-job family with degrees aid?

I.e. $200k+ in income a year and you want to give them a discount on their tuition? (Ignore fact that college now costs $70k/yr, and that $200k+/yr on top of mortgage & cost of 2.5 children is often not enough to graduate from middle class and build meaningful Wealth before 45)

I see you went to Andover. I went to a boarding school too. Think it’s the same for the large ones w/ large endowments?

MIT earned 13.5% on their endowment last year. Andover has >$1Billion in their endowment. Conservatively, $1B * 10% = $100M. Tuition is outrageously expensive but with no fin. aid to kids those Endowment Returns would be 100% more than tuition revenue. So yes. Same game :) Astute

Hey @ConradBastable! Is there a source or further reading for the claim that the 501(c)(3) status of universities depending "on more-than-half of their students being unable to afford the education (read: “receiving financial aid”)"?

1/ Understood, thanks for your reply. Some thoughts: - your language on the essay seems to imply a tight causality between maintenance of the 501c3 status and university education being necessarily too expensive. I think this really damages your arguments.

/2 This is because technically, the 501c3 status depends - to my knowledge & I could be missing something - on the following conditions: 1. the org must serve one of the public-good, charitable purposes defined in the tax law, i.e. educational, scientific, religious, etc.

/3 2. the org must *solely* be designed and operated to serve one of the charitable good purposes, 3. the excess income or "profits" cannot be distributed to a private shareholder, individual or entity (see: (link: https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations …) http://irs.gov/charities-non- …)

/4 it follows the govt's restrictions on political and lobbying activities. Therefore, universities could as easily as that have maintained their 5013c statuses by furthering any other educational activity that contributes to education/scientific research, i.e. they could show

/5 increased cost of research, increased salary, more buildings/construction of new labs, etc -- all of these, as well as giving financial aid, qualifies as "furthering the charitable mission" upon which a 5013c is established. In the case of universities, that's education.

/6 Therefore, in my mind, the central thrust of your argument, i.e. universities actively inflate tuition to stay tax-exempt, falls apart. They could as easily as that have distributed the increase in tuition across a variety of other expenses.

Who benefits the most from the endowments if these are non-profits?