Here is yet one more illustration for why one might argue such:
Because universities are non-profit institutions, wealthy boosters, alums, or corporations can write off 80% of the cost from income taxes when they purchase club seats and luxury suites.
That was from the Economics of Intercollegiate Sports. Remember the wise Bastiat: “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”
But generally speaking, this is but one small illustration for a much larger problem. What, exactly, IS a charity? Does simply calling oneself a non-profit entity mean that you are serving some amazing public purpose? Even our dear, beloved universities are actually run for the benefit of the faculty and the students – if there are public benefits beyond that they surely are ancillary to the fact that this is a playground for “us.” For instance, I get tax exemptions when I make purchases on behalf of my students. That does sometimes include books I buy for them (yes, some DO read!) but it also applies to coffee mugs, snacks, t-shirts or most anything else I buy in the name of education. It would be a lovely little study to see just how much of the tax exemptions universities obtain from their spending practices are actually used on things that are “in the public interest.”
The irony of this is two-fold. As you should no doubt know, the existence of universities is almost entirely regressive in nature. Wealthy people and upwardly mobile people attend and any public subsidies that make their way to us are no doubt coming from a class of people that is worse off economically on average than the members of the universities themselves. And take the coffee-mugs. When I buy coffee mugs to hand out at an event to my students, we don’t pay taxes. But when an inner-city Rochester resident buys coffee mugs for her family she ends up paying taxes – and those taxes must be higher because others are not paying “their fair share.” We can spend an entire year of blog posts on the regressivity of the higher ed system – a huge irony for all of those fashionable “progressives” running around campus promoting “social justice.” What a flippin’ joke.
The second irony is that when it comes to charity, we end up forcing groups to support each other that are fundamentally opposed to one another. So when the Students for the Ethical Treatment of Lawn Ornaments gets funding for some programming event, which is invariably free from taxation, that is asking Lawn Ornament Engineering Club to pay for it and vice versa. Anti-Jewish groups supporting Jewish groups. Pro-abortion groups supporting anti-abortion groups. And so on.
And all of this is wholly aside from the fact that the term “non-profit” is completely misleading. To suggest that my university is a non-profit is akin to suggesting that cigarette companies are interested in “public health.” But that’s for another day.