SVA's "for-profit" status

taxguy
Tue, 02 Aug 2005 15:44:32 +0000

Unsoccer-mom, I am not denying the quality of SVA. Let me make that clear. I do believe that SVA is not only a fine art school but is one of the better “for profit” institutions!’ I specifically like their animation and digital program offerings. US News and World Report ranks their graduate program overall in the top 10 fine arts masters programs and their graphic design program also is highly ranked.

However, that said, there is no reason to remain “for profit” UNLESS someone wants to be enriched. Why?


For profit schools pay taxes. Non profits generally don’t . Why remain a “for profit” school just for this reason alone?
Donors will get a deduction for contributions to non-profit schools. This is NOT true with a “for profit” school. Thus, you severely limit donations and charitable contributions with “for profit” schools and probably will never achieve any significant endowment. Again, why remain “for profit” with this one major disadvantage?
Non profit schools get much lower postal rates than “for profit” schools.


Again, I distrust any school that is “for proft.” If SVA was so interested in plowing back money into the school, wny not convert to a non profit status? It isn’t that hard or expensive. Moreover, as you noted, SVA was investigated by the government under the title“Enforcement of Federal Anti-Fraud Laws in For-Profit Education. Even the government suspects “for profit” schools for the reasons given above.

If you feel that there is more to this than what I am saying, I would advise you to ask a tax lawyer who specializes in non profits about the benefits and detriments of “for profit” vs. non profit status. I am not infallible. Maybe there is something that I am missing.

As I said, I think SVA is a fine school. However, I don’t understand why they would remain a “for profit” institution if they were really interested in plowing the money back into the school. I suggest that there are some hidden benefits to the owners or their families that is not shown in the financial statement.