Mission and Money

Mission and Money goes beyond the common focus on elite universities and examines the entire higher education industry, including the rapidly growing for-profit schools. The sector includes research universities, four-year colleges, two-year schools, and non–degree-granting career academies. Many institutions pursue mission-related activities that are often unprofitable and engage in profitable revenue-raising activities to finance them. This book contains a good deal of original research on schools’ revenue sources from tuition, donations, research, patents, endowments, and other activities. It considers lobbying, distance education, and the world market, as well as advertising, branding, and reputation. The pursuit of revenue, although essential to achieve the mission of higher learning, is sometimes in conflict with that mission itself. The tension between mission and money is also highlighted in the chapter on the profitability of intercollegiate athletics. The concluding chapter investigates implications of the analysis for public policy.

Burton A. Weisbrod is John Evans Professor of Economics and Faculty Fellow of the Institute of Policy Research at Northwestern University, Evanston, Illinois. His publications include 15 authored, coauthored, or edited books, including the landmark study The Nonprofit Economy (1988) and To Profit or Not to Profit: The Commercial Transformation of the Nonprofit Sector (Cambridge University Press, 1998), as well as nearly 200 articles in journals such as the American Economic Review, Quarterly Journal of Economics, Journal of Political Economy, and the Journal of Policy Analysis and Management.

Professor Weisbrod is an elected member of the Institute of Medicine of the National Academy of Sciences as well as Fellow of the American Association for the Advancement of Science, and he is a former elected member of the Executive Committee of the Ameri-can Economic Association. A former Guggenheim Foundation and Ford Foundation Fellow and senior staff member of the U.S. Council of Economic Advisers, he recently completed terms as a member of the National Advisory Research Resources Council of the National Institutes of Health and as Chair of the Social Science Research Council Committee on Philanthropy and the Nonprofit Sector. Professor Weisbrod has received the Lifetime Research Achievement Award of the Association for Research on Nonprofit Organizations and Voluntary Associations and the American Public Health Association's Carl Taube Award for Outstanding Contributions to the Field of Mental Health Services Research. He is included in biographical listings such as Who's Who in Economics, Who's Who in Science, and Who's Who in the World.

Jeffrey P. Ballou is an economist at Mathematica Policy Research, Inc., in Cambridge, Massachusetts. Prior to joining Mathematica, he held faculty positions at Northeastern and Northwestern Universities. Dr. Ballou's professional research spans multiple industries, including higher education and health care, areas in which he consults regularly for policymakers and institutional stakeholders. He received his Ph.D. from Northwestern University.

Evelyn D. Asch is Research Coordinator at the Institute for Policy Research at Northwestern University. She has also taught research and writing in the humanities and social sciences at Loyola University Chicago, DePaul University, and Shimer College. Dr. Asch is the author (with Sharon K. Walsh) of three college texts in the Wadsworth Casebook in Argument series: Just War (2004), Civil Disobedience (2005), and Immigration (2005). She received her Ph.D. from the Committee on the History of Culture of the University of Chicago.

Burton A. Weisbrod

Northwestern University

Jeffrey P. Ballou

Mathematica Policy Research, Inc.

Evelyn D. Asch

Northwestern University

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© Burton A. Weisbrod, Jeffrey P. Ballou, and Evelyn D. Asch 2008

This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.

First published 2008

Printed in the United States of America

A catalog record for this publication is available from the British Library.

Library of Congress Cataloging in Publication Data

Weisbrod, Burton Allen, 1931–
Mission and money : understanding the university / Burton A. Weisbrod,
Jeffrey P. Ballou, Evelyn D. Asch.
 p. cm.
Includes bibliographical references and index.
ISBN 978-0-521-51510-8 (hardback)
1. Universities and colleges – Finance. 2. Education, Higher – Aims and objectives. I. Ballou, Jeffrey P., 1971– II. Asch, Evelyn Diane, 1956– III. Title.
LB2342.W384 2008
378.44 – dc22 2008017806

ISBN 978-0-521-51510-8 hardback

Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party Internet Web sites referred to in this publication and does not guarantee that any content on such Web sites is, or will remain, accurate or appropriate.

To my wife, Shirley, whose warmth, creativity, and determination have inspired me.

BAW

To Lana.

JPB

To my husband, John Tingley, and my children, Rachel and Nathaniel, for their love, support, and conversation.

EDA

Contents

Illustrations

Figures

Tables

Appendix Tables