Exceptions for the exceptional?

A few random thoughts prompted by the student loan scandal, though not necessarily connected to it:

Nonprofit executives frequently think that rules applying to other business people, or other businesses, don’t apply to them. Financial aid officers of the Ivy League colleges used to get together and agree on precisely equal financial aid packages for students they’d accepted in common, so the students could choose a college untainted by any concerns of a merely pecuniary nature. This continued until the Justice Department stepped in and the courts informed the surprised institutions that colleges and universities, like all other businesses, are subject to the antitrust laws and are not permitted to engage in price-fixing.

As an Executive Director, the Nonprofiteer responded to a notice from the Federal government instructing her to confirm the immigration status of any new hires by telling her staff, "That doesn’t apply to us," though she’s a lawyer and should have known that in the absence of an explicit exemption it actually did apply. As a consultant, she frequently encountered prospective clients who wanted her to work for free "because we’re a nonprofit," though that rationale would have made NFP Consulting completely unable to sustain itself: all of its clients shared that distinction.

Perhaps the student loan officers who accepted emoluments to steer students to particular lenders thought that what would constitute a bribe in any other sector wasn’t one in their case because, well, they work for a nonprofit.

Nonprofits are exceptional, of course; but it’s important that they recognize in what ways they are–and in what ways they aren’t.


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