21
Aug 2014
NO COMMENT
On Accreditation and Non-Profit
I was sent this article (http://www.franklin.edu/blog/non-profit-vs-for-profit-colleges-what-you-need-to-know) the other day by a good friend of mine and marketing exec Meghann Conter (The Mistress of Social Media). I have to say that I was not surprised by the content of this article, nor by the seemingly blatant negativity that seems to be directed at the “for-profit” nomenclature that is a part of many schools. I am writing this as the founder and owner of a non-traditional, for-profit educational institution (read: “school”) Next Dimension. We offer “accelerated” IT certification training classes through programs like the GI Bill and MyCAA. The most common 2 questions I get when offering our services to another institution are; 1: Are you non-profit? and 2: Are you accredited?. The answer to both today is “No.” Here is why: Every school that wants to become a “non-profit” has to go through an application process with the IRS. During a period of anywhere from 3 months to 2 years, the school can register with the state as a non-profit, but does not earn “non-profit” status federally until the application process is completed with the IRS. Until then, technically, EVERY SCHOOL IS “FOR-PROFIT”. My school today is an LLC. We don’t have shareholders, and don’t offer any stock options. We ARE about making money, and yes I do earn a paycheck, I also teach many of the classes myself. I also pay my other instructors, and I encourage them to write their own material. My recommendation to anyone who is looking to use their GI Bill with a school (whether for-profit or non-profit) is to do your research, call or email the instructors/professors and ask them questions (we’re teachers, we love questions). As far as accreditation goes, we are not a traditional school and it would be VERY difficult and costly for us to get accredited. Most (not all) accreditation works like this: The school submits all of its founding documents, curriculum, catalog, and other paperwork to a 3rd party. Then you wait a minimum of 1 year, the idea here being that the 3rd party is examining and auditing all of your documentation, which they probably are not. I am very proud to say that we are CO based because it means that if you take a class with us, and you don’t like it for whatever reason, and we refuse to make good on it, you can go to the state and seek compensation. Accreditation is there for this purpose as well, but is rarely used or even made available to the student. Now, the big difference between “non-profit”(NP) and “for-profit”(FP). NP businesses are required to have a statement of purpose on file with the IRS, FP businesses have a statement of purpose too, but it’s not on file with the IRS. NP businesses don’t file taxes. FP pay taxes, a LOT of them, in fact somewhere between 40% and 55% of their income goes to taxes. NP pay their board members a lot of money, FP doesn’t have a board. NP has an empty bank account at the end of the year, FP has money left over to pay taxes and fund the school. All that being said, I will be applying for NP status for the school for 2015 simply to avoid the stigma that surrounds being FP, and so that when someone asks me those famous 2 questions I can at least say “yes” to one of them.