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A University Is A Social Enterprise, So Why Don't They Act Like It?

Instead of focusing on making sure they’re preparing a wide range of students to make the world better, universities seem far more focused on making money.

I just got back from the Ashoka U Exchange, a truly awe-inspiring convergence of college and university students, faculty, and administrators from 30 countries. These universities are putting change-making at the center of their mission because they believe it’s the right thing to do and because in the age of free online courseware, Millennials are drawn to campuses where they can be part of a community that can prepare them for lives of purpose and meaning.

I got the chance to learn from and connect with amazing people like 21-year old Thiel fellow Eden Full, Mosaic solar CEO Billy Parish, New York Times Fixes journalist David Bornstein, Civic Ventures founder Marc Freedman, and former Obama deputy Henry De Sio, and to hear Bill Drayton himself speak to a small group of university leaders as part of the President’s Track.

But something has been bugging me:

A university, if you think about it, is one of the original social enterprises. It’s a publicly and philanthropically supported organization with missions for good in both research and teaching. Unlike charities, universities’ services are not free to the people they serve. In this, they resemble some of the newer breed of social enterprises like microfinance organizations, which lend money to the poor at interest—often quite high interest.

But universities by and large refuse to rigorously track their impact on their students: How many leave with degrees? Are they able to pay back their debt? Do they find good jobs in their chosen field? And they don’t want the government to impose metrics either.

Metrics may be THE defining characteristic of 21st-century social enterprise. In the absence of good honest metrics and accountability measures, a social entrepreneur risks drifting very far from her mission. For example, a central—if not the central—historical mission of the university as a social enterprise is to provide access to a higher education as a path to accomplishment for highly able people of all social backgrounds. Sure enough, in the absence of good metrics and accountability, colleges and universities collectively no longer contribute to social mobility in this country. The wealthiest universities with the largest endowments claim to give out financial aid at their discretion to counteract the effects of their stratospherically high tuition, but the vast over-representation of the richest kids at the most expensive institutions indicates that "need-blind" admissions isn’t doing its job. Fifty-four percent of the richest kids graduate; only 9% of the poorest kids do.

At Ashoka U, I listened to a private university president talk about how he was partnering with a nonprofit to allow his students to spend their entire freshman year doing good works in a developing-country village. They would then arrive on campus as sophomores and have three years to complete their degrees. My jaw dropped when he revealed that the university, which has little financial aid funding, plans to charge students the full regular $40,000 tuition for the privilege of digging wells in Africa, a sum to be split between the university and the nonprofit. This silver-plated charity scheme saves the college money, by arranging for paying students to spend less time on campus, and gives the college the marketing angle of being innovative and aligned with a social mission.

Charity begins at home. If a college can’t provide meaningful access to students regardless of income, either by radically lowering its upfront costs through the use of technology, shortening time to degree, increasing the flexibility of its programs, changing its recruiting, support and accreditation policies, or all of the above, then it shouldn’t call itself a changemaker.

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