What is Drexel, anyway?
The noble purpose of a nonprofit can become quite complicated by private contracting.
By: Roger McCain
Issue date: 5/18/07 Section: Ed-Op
Originally published: 5/18/07 at 3:59 AM EST
Last update: 5/18/07 at 3:59 AM EST
Originally published: 5/18/07 at 3:59 AM EST
Last update: 5/18/07 at 3:59 AM EST
What is Drexel? In the terms of game theory, Drexel is a coalition of students, faculty, administrators and others who intend to work together in our common interest. In the terms of Austrian Economics, Drexel is an enterprise - an organization with a common decision-maker whose goal is to accomplish some purpose. (The word "enterprise" is derived from the French verb meaning "to undertake.") But Drexel is a nonprofit enterprise. And just what is that, and what does it mean for those of us who spend our days at Drexel?
The term "a nonprofit enterprise" is a bit confusing, as negatives often are. It doesn't mean that the enterprise cannot earn a profit. It may earn a profit (although that may mean tax or political complications) but what it cannot do is distribute the profit to shareholders or other stakeholders in the organization, such as employees or customers. (Some enterprises do that. Employee cooperatives distribute the profits to the employees, and consumer cooperatives distribute the profits to the customer - at least those who are "members.") In other countries, what we call "nonprofit enterprises" are often called "non-government organizations," NGO's. That isn't very informative either. What sets NGO's apart is that their objectives are defined by a mission. As a nonprofit, Drexel's resources are to be committed to that mission rather than (as in profit-seeking corporations) to increasing the profits or (as in a governmental organization) executing the decisions of a sovereign power or popular assembly. Drexel's profits, if we earn any, are to be recycled into activities consistent with our mission, as with our recent initiation of a new law school.
(In the case of Drexel, the mission is the advancement of arts and knowledge, both by transmission of existing knowledge and creation of new art and knowledge through research, development and creativity. I think of technology as a mixture of art and knowledge. We transmit that art and knowledge mostly, but not only, to our students.)
The term "a nonprofit enterprise" is a bit confusing, as negatives often are. It doesn't mean that the enterprise cannot earn a profit. It may earn a profit (although that may mean tax or political complications) but what it cannot do is distribute the profit to shareholders or other stakeholders in the organization, such as employees or customers. (Some enterprises do that. Employee cooperatives distribute the profits to the employees, and consumer cooperatives distribute the profits to the customer - at least those who are "members.") In other countries, what we call "nonprofit enterprises" are often called "non-government organizations," NGO's. That isn't very informative either. What sets NGO's apart is that their objectives are defined by a mission. As a nonprofit, Drexel's resources are to be committed to that mission rather than (as in profit-seeking corporations) to increasing the profits or (as in a governmental organization) executing the decisions of a sovereign power or popular assembly. Drexel's profits, if we earn any, are to be recycled into activities consistent with our mission, as with our recent initiation of a new law school.
(In the case of Drexel, the mission is the advancement of arts and knowledge, both by transmission of existing knowledge and creation of new art and knowledge through research, development and creativity. I think of technology as a mixture of art and knowledge. We transmit that art and knowledge mostly, but not only, to our students.)
