BOSTON--()--At a time when student debt has exploded and the cost of a college education has grown increasingly out of reach, a new study highlights the pressing need for greater financial transparency about taxpayer-subsidized institutions of higher education – and a greater acknowledgment from those institutions of the social contract that tax exemption represents.
“Public Investment in Private Higher Education: Estimating the Value of Nonprofit College and University Tax Exemptions”
Released today by Tellus Institute, the report, “Public Investment in Private Higher Education: Estimating the Value of Nonprofit College and University Tax Exemptions,” uses Northeastern University as a demonstration case. The analysis finds that in fiscal year 2011, Northeastern received a total of $181.7 million in public support. Of that public support, the largest share -- $94.4 million, or 52 percent of total public support -- came from the university’s local, state, and federal tax exemptions. The balance of $87.3 million came in direct federal funding through grants, contracts, and financial aid.
“Tax exemption embodies an important part of higher education’s social contract with the public that generously supports private colleges, yet we know very little about the actual value of this public subsidy that taxpayers provide to nonprofit schools,” said Tellus Institute fellow and report co-author Joshua Humphreys. “Our report provides a straightforward, transparent approach to understanding more fully the value of that public investment,” he continued.
Students and stakeholders from labor and community groups directly affected by colleges’ activities in their local communities have taken a particular interest in this new area of research.
“The tax exemptions would be perfectly acceptable if Northeastern were fully meeting the expectations of their social contract with the wider community,” noted James Goldstein, senior fellow at Tellus Institute and director of the Institute’s Sustainable Communities program.
View full report at http://tellus.org/publications/files/college-tax-exemption.pdf
About Tellus Institute
Tellus Institute is a leading non-profit, sustainability research and policy organization working on pressing social and environmental issues. Since its founding in 1976, the Institute has worked at every geographic level, bringing analytic rigor and a systemic, global perspective to a wide range of critical problems, from energy and environmental resource use to climate change, corporate redesign and sustainable development. Among the Institute’s recent research initiatives around higher education have been projects on sustainable futures, responsible endowment investment, excessive executive compensation, financial transparency, and college trustee conflicts of interest.