

Scott Adams: what if plumbers had the business model of private colleges? - andreyf
http://gist.github.com/raw/82252/f036ff14e5837533e9b097e3bca2957e5f4ae2f3/gistfile1.txt

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demallien
Of course, Adams' argument falls down because of one minor point - you get
value in return for donating. Here's a few examples: 1) Your children will get
priority when it's their turn to go to university. 2) Keeping the school at
the top of list means that your own degree has more value - it's much more
impressive to be able to say 'I went to Harvard' than to say 'I went to
Harvard before it became the run down dump of a school that it is today' 3)
Alumni generally retain the ability to access various university resources.

On top of these direct compensations, there are a couple of others to
consider: 4) When you go to a school such as Harvard, your experience is being
subsidised by the Alumni. Once you too are an alumni, you would have to be a
poor person indeed to not feel at least a little obligated to do the same for
the next generation, if your circumstances permit it. 5) If you do have money
that you want to donate, I for one can think of few rational choices that are
better for society than a university. However the university uses that money,
it will help them to obtain the best researchers (either directly or
indirectly), and help those researchers get access to the funds they need to
improve the state of human knowledge.

~~~
michaelkeenan
>I for one can think of few rational choices [for donations] that are better
for society than a university

I disagree. Sometimes people analyze the charitable causes that do the most
good (by various metrics, such as lives saved) and I've never seen university
donations on the list. The Copenhagen Consensus is one example.
<http://en.wikipedia.org/wiki/Copenhagen_Consensus>

Some people, noting that universities are non-profits and enjoy government
subsidies, think that Ivy League universities are likely to be wasteful, and
that society may be over-investing in them. Some even argue that the value of
an Ivy League university is more the signal that it sends than the education
it provides. Competition for this signal leads to a lot of wasted or
inefficiently allocated effort. For this reason, marginal tertiary education
may have negative externalities (because we'd all be better off if everyone
signaled 50% less).
[http://www.gmu.edu/departments/economics/bcaplan/e370/IO7.ht...](http://www.gmu.edu/departments/economics/bcaplan/e370/IO7.htm)

So I would hesitate to donate to a university rather than, say, an AIDS
prevention charity. If I specifically wanted technological progress, I'd
probably consider contributing to the X Prize Foundation, or something like
it.

~~~
katz
> So I would hesitate to donate to a university rather than, say, an AIDS
> prevention charity.

You know that most AIDS prevention charities are a giant waste of money? There
is almost no metric with which they are measured - so people keep doing the
same thing over and over.

With private colleges the metric is fairly clear (publications, degrees
awarded, patents, etc...).

~~~
michaelkeenan
To find an example that I considered better than a university, I just referred
to the most effective charity that the Copenhagen Consensus came up with,
according to Wikipedia: "The highest priority was assigned to implementing
certain new measures to prevent the spread of HIV and AIDS. The economists
estimated that an investment of $27 billion could avert nearly 30 million new
infections by 2010."

That sounds like a pretty good deal, but it turns out the Copenhagen Consensus
website says micronutrients are the best investment, so maybe Wikipedia's
information is old.

In the hypothetical that I had serious money to donate, I would of course try
to evaluate effectiveness of the charities. Hopefully I could find the
exception to "most".

~~~
ars
27 billion for 30 million infections? That's a very poor return on investment
(if we can calculate such things for life).

AIDS is not curable, just preventable. If on the other hard we worked on
malaria and TB we would prevent closer to 1 billion infections!

And malaria and TB are curable, and malaria causes anemia which makes people
tired and less productive, and the cure is considerably cheaper than AIDS
prevention.

I (cynically) think that the reason people are focused on AIDS is that the
donor countries are worried about it, but they are not worried about malaria
and TB. People donate for causes that are close to them, so it's not _so_
cynical for an individual, but I think governments should be instructed by
utility - but they are not.

~~~
katz
TB is usually a final stage disease that people with AIDS get. It is one of
the most common ones (AIDS only destroys the immunity). When you hear someone
who died of AIDS or lung infection in a high-AIDS country (e.g. South Africa)
you can be fairly sure that it is AIDS.

TB can almost always be cured in healthy adults. The point being - even if you
rescue 10 million people form dying from TB - 10 million would probably die of
something else.

The best focus for anti-AIDS programs is probably things such as mother to
child prevention (i.e. preventing an unborn baby from contracting AIDS from
his mother, and providing formula milk to new mothers). The effects of this is
measurable.

------
cperciva
It's interesting to note that much of the success of large US universities,
compared to their European counterparts, has been driven by the fact that
American alumni are far more generous than European alumni. Only about 10% of
Oxford alumni make donations to the university, while most US universities
have donation rates exceeding 50% -- and Oxford and Cambridge are doing
considerably better than their continental counterparts.

Whether this is due to US universities being more aggressive in soliciting
donations (they are), more willing to allow admissions decisions to be
influenced by donations (they are), or simply due to US alumni having more
money to throw around (the US has a higher income gap between degree and non-
degree holders than Europe) isn't clear; but whatever is causing this
difference in donations, it has huge consequences.

~~~
troels
Without actually knowing anything about it, I would venture to guess that
European universities get a lot more funding from the state than American
universities do.

~~~
cperciva
It depends how you measure it. European universities get far more money from
governments as fixed operating grants; but US universities slice money out of
research grants (they call it "overhead") and redirect it to their operating
budgets.

~~~
yummyfajitas
Quite right. Remember, when a politician proposes $N for science, remember
that he actually means 50% of $N as subsidies for universities, and 50% of $N
for science.

(Assuming of course that the science is done by university professors. )

------
ChrisMac
May as well link to the original source:

<http://dilbert.com/blog/entry/brainwashing/>

~~~
andreyf
Yeah, something about that design rubs me the wrong way... but thanks :)

------
mustpax
The scholarship that allowed me to attend my Alma Mater was entirely funded by
the donations of other Alumni, some of whom I've met. I know most students in
the US get federal support as well, but being an foreign national, this wasn't
true for me.

I've been awarded time and again in my professional life due to the quality of
my education. I feel I have good reason to feel indebted to my Alma Mater, and
will donate to it when I have sufficient means to do so.

Honestly, supporting motivated students get a great education seems as worth a
cause as any.

~~~
DanielBMarkham
So then, to be honest it's really not _supporting motivated students get a
great education_ , is it? It's supporting motivated students get an education
_at the same place I did_

I certainly understand it, and even commend it, but I don't think its as
charitable as thing as perhaps you are making it out to be. Your concern seems
to be more with the institution and less with helping motivated students get
educated.

Sorry for the sharpness of that analysis, but I think it must be pointed out.

~~~
mustpax
Fair point. But I'm sure you'll concede that the more abstract goal of
"supporting motivated students" cannot be supported so straight-forwardly.
Should I be donating to an inner city Charter school? Or to a public school
run by the school district? The whole public education reform discussion is
very complex, and even knowing several teachers (working in public and private
institutions) I am having difficulty making up my mind.

My first hand experience in college gives me direct and clear insight into the
benefits of that particular institution. So yes, it is not by coincidence that
I'm donating to that institution in particular. Still, I would claim that this
is also a good faith effort to "support motivated students" applied
concretely.

------
ars
Sigh. Now change university (or plumber) to comic strip writer. Why does he
still get money every time his comic strip is sold? Shouldn't he get money
just once? The publisher pays him a flat fee, and done.

The university donation is charity. But I don't see him asking, why do people
give to charity.

Now change plumber to doctor - the rich support the doctor and the poor give
what they can. Sound reasonable? It should - it was the typical model for a
good part of history. So why is doctor different from plumber?

~~~
DanielBMarkham
<friendly sarcasm>

Now substitute me for doctor. Shouldn't people give me money when they can for
the good that I do for society? Why am I any different than the doctor? Is the
guy who prescribes medicine that much better than the guy who writes code to
manage the prescription? From each according to his ability, to each according
to his needs, right?

</friendly sarcasm>

~~~
ars
Why be sarcastic? You are not different.

Except that these days we don't fund many things that way.

But it wasn't always so, in the past if you were not a patron of the arts
(which also meant science), you were nobody.
<http://en.wikipedia.org/wiki/Patronage>

Effectively that was a way of funding exactly the type of thing you describe -
you just had to explain how what you did helped society. For example look up
the Balmis Expedition, which was funded by the King of Spain.

I'm trying to say, it's not really so strange to fund things that way, it's
just that today it's limited to certain types of institutions/programs.

The main reason it's not as common these days is the flattening of the income
curve. You don't have such extremes of wealth and poverty. People can usually
afford the things they need. But when they can't, this type of funding does
come into play.

This explains why expensive universities get donations, but cheaper ones
don't.

------
ssharp
Alumni donations subsidize the cost of research (which has obvious benefits)
and also serves to keep tuition levels "low". I know low is a difficult word
to associate with tuition but without development money coming in, the money
would need to be raised elsewhere.

It's almost like when investing in startups. Not every graduate is going to
strike it rich but the more graduates there are, the more likely that more of
them will (assuming your standards remain the same). So you can keep your
tuition low enough to attract enough people and hope that the lost tuition
revenue will be made up for by alumni donations by those who do well with
their degree.

Trying to apply "business model A" to "business B", seeing that it doesn't
work, and then saying "business model A" is a dumb idea isn't a worthwhile
approach to looking at something. It's actually a pretty stupid way to look at
things. I generally hate when people try to take something relatively
complicated and try to dumb it down. The wrinkles and complications are what
makes the problem. If every problem was summed up into one digestible
solution, there wouldn't be any unsolved problems.

------
ggruschow
I give money to a school I attended. They don't demand tuition, so they need
donations to help others like me. If a plumber had done work for me when I
couldn't afford it at the time, but still helped me out of goodwill.. then
they'd reaping my goodwill now too.

Why are we linked to a copied version instead of the original, which is
directly linkable also? I like the plaintext, but it says (C) on the bottom of
the page.

------
brent
His degree clearly wasn't worth it. Doesn't he realize that part of his
education was subsidized by other donors? It would be more like insurance
paying part of the plumbing bill and giving to insurance your entire life.

------
andy
I graduated about 4 years ago from Northeastern University and I've never been
asked for money. Maybe they can see I still have student loans to pay off?

If they ever do call me, I plan to tell them I'll donate some money if they
fire one of the 2 staff members I absolutely despised. When I was a student
there I would think to myself how much money/influence it would take to get
them canned.

------
raganwald
This is simple. Giving is voluntary. Some people _Went to_ such-and-such a
school. They needn't give. Others are _Members of the Alumni_ for such-and-
such a school. They should give generously. It's entirely up to you to decide
whether you simply paid for a certain education, or whether you entered into a
life-long association with your school's institutions.

~~~
gills
So do we _earn_ degrees, or do we _rent_ degrees?

edit: I know it sounds snarky, but I mean it in a curious way, inspired by
your 'life-long relationship' phrase. Is the school vetting you for life, or
is it a one-shot irrevocable deal? Can a school revoke a degree for
incompetence (...where it was obviously a mistake to award the degree in the
first place)? What about discontinued financial support?

~~~
raganwald
The tuition is purchased, the degree is earned, membership in a social group
of Alumni requires participating in its support.

I see that I was remarkably unclear, even for me. What I mean is that if you
go get your degree from Harvard, you are always entitled to it, without paying
another cent. But if you are the type to fraternize with the administration,
attend games and other events, and describe yourself as a "Harvard (Wo)Man" in
the present tense, you probably ought to support it just as you would support
any other type of club that has ongoing expenses.

------
DanielBMarkham
I have never completely understood this.

My wife went to a prestigious ivy-league school. I went to college here and
there at the cheapest places I could find. Now she gets hit up for money all
of the time, and I never hear from the three colleges I attended.

Assuming we studied the same thing with the same perceived value (we didn't,
but this is a thought experiment), why should she feel obligated to support
her experience and I not feel obligated to support mine?

I guess the rub here is "perceived value." Can a case be made that the
perceived value in the same education from a different institution be worth
supporting all of your life? If so, don't we already do that with federal
research grants and tuition support for students?

I have the same confusion when school kids come by raising money for a new gym
or something. So I pay taxes to the local government that then allocates money
to the school, but that's not enough, so then the schools use my kindness
towards kids to raise even more money for their pet projects?

It's not enough that colleges are now big businesses, that most professors
don't spend their time in the classroom, that tuition costs have risen far
faster than inflation -- now we're expected to hold some special place in our
wallets for them as well?

I guess. I guess if you're really _that_ sentimental about your college.

I am not.

~~~
ars
It's because ivy-league schools are too expensive for the average student, so
they get donations, but the cheaper schools are not, so they don't.

See also my other comment, elsewhere in this thread.

~~~
DanielBMarkham
I believe you are saying that because certain places overcharge for the same
experience, they should be more worthy of charity.

If this were the case, then the more they charge, the more worthy they would
be, no?

~~~
ars
Not exactly.

First, people have an innate "feel" for exactly how much these experiences are
worth, and thus should charge. They don't charge more than this. This makes
sense of course from a capitalistic point of view.

Second remember that is the very same people who went there who are sending
the donations - it's not the random public.

The people who went there are uniquely qualified to judge if it's worth the
money - and they are the ones who decide to donate and allow others the
experience.

It's is basically a finely tuned system that makes the fee exactly what it
should be - they can not just raise it and be worth more.

Many people would consider those schools a waste of money - but they are not
the ones who go there. The people who go there are exactly those who consider
them a good value, and it's those same people who feel that others should be
given the opportunity to have that experience. And since the amount is high,
and they know not everyone can afford it, they donate.

------
ironsam
This is hardly limited to private schools. I went to a state university and
they do the same thing while simultaneously taking money without my direct
authorization (taxes; still in the state).

