Nonprofit Industry Analysis Essay

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Industry Analysis of Nonprofit Institutions Nonprofit educational institutions compete for resources and market share like any other entity. “The same competition for resources, customers, fund balances (profits) and endowments exist, and higher education is facing the same demands from its customers, students and parents, as well as from its revenue sources… alumni…” More broadly, both for profit and nonprofit firms act to create value. Harvard College, like its competitors in the Ivy League, is a private, nonprofit institution. Harvard creates value by accomplishing its mission, to educate “citizens and citizen-leaders for our society.” While for profits and nonprofits compete differently, qualitative criteria such as reputation and trust …show more content…

If they gave no aid at all, so the argument goes, they could find enough outstanding, full-paying students to fill their classes without losing academic quality. This argument, we believe, underestimates the interplay between mission and market that has evolved over time for even super-elite private colleges, such as the Ivy League. Many of these institutions were humble-born hundreds of years ago, using aid like any other college to attract students. Today, they could get by without giving such aid, but they likely would not be able to recruit such a range of “interesting” students or produce such a diverse student body, socially and racially, due to societal income stratification. Not offering aid would alienate customers (prospective students including full payers), alumni and other donors—not to speak of existing students, faculty, and public opinion. Aid-supported diversity, in other words, is not just an ideological and educational value; it has become a market asset too. If a highly visible college looked too socially exclusive it would, over the long term, face economic and political scrutiny. In their own way, top colleges are still a part of the market system. With an understanding of the competitive forces at play within the Ivy League, we now examine how firms set

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