However, reality demonstrates that Universities are most definitely for profit. This is embedded in their operating principles. Have you worked with the Office of Technology Licensing?
This includes that you would call "nonprofit" according to IRS, but this is actually an issue that has been debated since Bayh Dole by people who understand the subtlety of what I'm talking about. In short, the very definition of nonprofit itself is inadequate the span the nature of corporations which are under 501c3.
> However, reality demonstrates that Universities are most definitely for profit.
They certainly don't return profit to investors, which is what 501c3 and several related-but-different "nonprofit" designations refer to.
I'm not sure in what other sense you could be meaning that they are "for profit".
> Have you worked with the Office of Technology Licensing?
Certainly, Universities have parts of their operations devoted to generating revenue; all nonprofits necessarily do, since if they don't generate revenue that meets expenses, they can't continue to operate. Revenue is not the same thing as profits.
> people who understand the subtlety of what I'm talking about
If you have a coherent idea, perhaps you can explain it rather than making implications that anyone who hasn't read your mind is intellectually defective.
> In short, the very definition of nonprofit itself is inadequate the span the nature of corporations which are under 501c3
Since the relevant definition of nonprofit comes from 501c3, it is, necessarily, sufficient to span the entities which fall under 501c3, since anything it doesn't span doesn't, ipso facto, fall under 501c3.
Universities collect funds. The excess of these funds, which are not required for the costs of maintaining the university, are distributed to professors and students (this is profit returned to investor; the professors invest time and opportunity cost while the students invest labor) in the form of internal grants. These professors and students then use the grants to develop technology, which they then use university funds to develop into companies (while also getting patent royalties from the OTL for having patented the tech and licensed it), which tend to then hire employees and donate funds back to the universities that fostered them.
This activity has caused many to question the tax-exempt status of universities. The purpose of tax exemption for universities is to promote education, not prevent universities in acting as for-profit institutions.
Some examples: the (complex and unique) example of Cooper Union.
The audits identified some significant compliance issues at the colleges and universities examined,” said Lois Lerner, Director, Exempt Organizations division. “Because these issues may well be present elsewhere across the tax-exempt sector, all exempt organizations need to be aware of the importance of accurately reporting unrelated business income and providing appropriate executive compensation.”
from article: "The school’s policy of sharing patent royalties with faculty could cost the university an additional $20 to 30 million in taxes a year."
Please, do not ever tell somebody they are intellectually defective; it weakens your argument. Further, as I've demonstrated everything to support my case, in showing that there are 501c3 unviersity organizations which have been cited by the IRS for having violating the terms of that.
> The excess of these funds, which are not required for the costs of maintaining the university, are distributed to professors and students (this is profit returned to investor; the professors invest time and opportunity cost while the students invest labor) in the form of internal grants.
Internal grants are not a redistribution of profits, they are an internal budget allocation. The funds don't become personal funds.
> This activity has caused many to question the tax-exempt status of universities.
People question lots of things on bases which are not legitimate.
> The purpose of tax exemption for universities is to promote education, not prevent universities in acting as for-profit institutions.
Its actually both, as is obvious from the tax code. Tax exemption under 501c3 requires both not being operated for profit and operating a specific form or function of entity (educational, in the case relevant to universities.)
> Note the discussion of unrelated business income.
Unrelated business income is a separate requirement of tax-exemption from not operating for profit; income from unrelated (to the tax-exempt purpose) business income is taxable to protect for-profit business from not-for-profit institutions. The fact that the IRS found some issues with some colleges and universities regarding proper reporting of unrelated business income does not mean those colleges and universities (much less universities in general) are operated for profit.
> There is an active lawsuit against Princeton on similar grounds
The existence of an active lawsuit isn't proof of anything except the existence of someone with a sufficient interest in the legal effects of the finding that the lawsuit seeks.
> Please, do not ever tell somebody they are intellectually defective
However, reality demonstrates that Universities are most definitely for profit. This is embedded in their operating principles. Have you worked with the Office of Technology Licensing?
This includes that you would call "nonprofit" according to IRS, but this is actually an issue that has been debated since Bayh Dole by people who understand the subtlety of what I'm talking about. In short, the very definition of nonprofit itself is inadequate the span the nature of corporations which are under 501c3.