The College Board and ACT are nonprofits. We mostly recognize these organizations as the folks who provide the tests and test scores required for college entrance. Although I don't know that this service needs to be provided by a nonprofit, it is and it is one a revenue generator for these nonprofits. Again, doesn't seem to need to be a nonprofit to do this but is.
The College Board and ACT are also nonprofits with huge incomes from a by-product of their work -- they sell the names and contact information. And, according to the San Francisco Chronicle, this product is in high demand and pays good money. The article's focus was not how much money these two nonprofits make or how consistent selling the contact lists are with their respective missions (they likely pay taxes on these ventures) but rather about the related privacy issues.
Still, from a governing perspective, I might be patting myself on the back for having developed such a lucrative source of revenue while also asking what exactly am I doing that justifies being a nonprofit.
So, when it is too much? Even if it provides a needed service, one without any significant private sector competition, does a nonprofit earning a substantial amount of income offend our sensibilities? Or are we more concerned with how that organization spends those resources? Are we less offended by a nonprofit that reinvests its earnings into operations, or subsidizes the cost of its services for a certain class, as oppose to an organization that uses its earnings to pay high executive compensation?
Posted by: Kevin McQueen | May 27, 2011 at 03:16 PM