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Are colleges businesses or non-profit do-gooders? (Sports suggests a credibility gap)

May 4, 2010 – 6:09 PM

By Laura Pappano

U.S. Sen. Charles Grassley is making trouble – again — over the sweet financial deal colleges get as a result of their non-profit status. This time he is picking on federal tax rules that he says give colleges an unfair way to (indirectly) grow investments at taxpayer expense. (Read the Congressional Budget Office report here).

For Grassley, who has challenged college financial practices, including endowment spending and big-time sports funding, this is simply another step into a familiar batter’s box.

A key college defender — Mintz Levin lawyer Charles A. Samuels, who represents an organization that helps colleges issue bonds — says the last thing higher education needs right now is new limits on tax-exempt financing.

Samuels is right. But here’s the problem: This latest push-back from colleges comes just weeks after the NCAA agreed to a $10.8 billion deal with CBS to broadcast the men’s basketball tournament, funneling $740 million a year to member colleges.

The dollars, of course, were reason for athletic departments – including women’s coaches – to celebrate (more funding for everyone). And objectively, who wants to turn away cash?

What both of these items represent, however, is a fundamental challenge to colleges’ role as non-profit, educational, public-good-centered institutions with a responsibility to gender-equitable values. They represent the continued financial pressure toward centers of profit.

If colleges want the business benefits of non-profit status (and what’s wrong with that?) then they should fairly and equally promote the interests of male and female students. But the lopsided drive to peddle men’s sports “products” counters that very principle. When men’s sports operate on a separate plane from female sports — regardless of what Title IX says — there is an echo effect for every male and female student on campus. It is not just about sports.

While just 11 percent of the construction that employs these tax-exempt bonds is for athletic facilities (plus another 10 percent for “equipment”), who are these building for, exactly? Maybe men’s so-called revenue-producing sports?

The point here is not to sound like a conspiracy theorist or to fuss – yet again – about the monstrous over-promotion of men’s sports like NCAA basketball, but to pause long enough to ask the question: How is this all right? How does this practice of amping up broadcast of men’s basketball serve the public good?

How does using public money and broadcast dollars to house, support, and develop a farm team for NBA players (most of whom will never graduate and may not stay past freshman year) serve the male and female student bodies of these colleges?

Colleges do deserve public benefits, but those come with responsibilities to play fair.

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