In college, it seemed like every other male student was named Dave. The editor of the student newspaper was Dave. The dean of my residential college was Dave. Several freshman counselors were Dave. My roommate Dave had a seminar with three other Daves around the table. The era’s Dave dominance inspired the seminal Kids in the Hall song These Are The Daves I Know.
Jen was Dave’s female counterpart. There was a Jen across the hall and downstairs. I knew at least a dozen Jens. There was also a Jennifer song. So it was inspired – but in retrospect obvious – when student pranksters placed fancy invitations to a mysterious mixer in the mailbox of every Dave and Jen on campus. When guests arrived, they encountered fruit punch, canapés, large pre-labeled name tags – DAVE or JEN – and a hundred other Daves and Jens. More than a few Dave-Jen relationships were sparked at the first cocktail party where it was impossible to forget someone’s name.
Five years after Daves met Jens, R.D. DeSantis arrived on campus. Maybe college life became less fun (it did). Or maybe R.D. just never met his Jen (perhaps because he wasn’t Dave). Whatever the reason, R.D. evolved into Ron DeSantis, governor of Florida, Republican presidential candidate, and someone who seems to enjoy fighting more than laughing or mixing.
Governor DeSantis has curated a series of targets to make a name for himself among primary voters, with notable success. He first aimed at Covid restrictions, then – ironically – took a big-government cudgel to companies with polices that could be painted as Republican-repugnant, including Florida-based cruise lines and Disney, employer of 100,000 Floridians (and directly supporting another 400,000 jobs). After potential rival Glenn Youngkin’s K-12-fueled Virginia gubernatorial victory in 2021, education was an obvious next step. For the past year, DeSantis has been channeling Fox News bromides at K-12 schools, then Florida’s public colleges, taking on academic freedom, tenure, governance, and dismantling the system’s progressive liberal arts college. Then last month DeSantis crossed swords with the College Board.
You know the College Board. Since 1901, they’ve been the primary gatekeeper for America’s colleges and universities. They own and operate the SAT, the PSAT, and Advanced Placement (AP) courses taken by high school students to demonstrate college readiness. DeSantis’ problem with College Board was more Fox News: the new AP course in African-American studies “lacks educational value.” But of all DeSantis’ targets, College Board is most deserving, albeit for totally different reasons.
More than most, College Board suffers the slings and arrows of outraged customers: students with negative test experiences or outcomes. Social media is littered with disSATisfied comments and videos. I have no quarrel with SAT and AP. They fill a market need – if College Board didn’t provide, someone else would (in fact, 60 years ago, ACT did). Moreover, I’ve written about the need for a “distance traveled” model for college admissions; College Board’s products, which measure achievement, are a necessary but insufficient element. (This insufficiency – the fact that SAT and AP are widely viewed as barriers for diverse students – is an irony apparently lost on Governor DeSantis.) My quarrel is that College Board is a commercial business playing nonprofit theater.
College Board proclaims itself “a mission-driven not-for-profit organization that connects students to college success and opportunity.” But looking at its fees and policies, College Board doth protest too much, methinks:
College Board would respond by pointing to its fee waivers for low-income students. But they’re far from generous. Qualified students get up to two free SAT tests and $35 off on AP exams. But you’re not qualified unless you meet USDA free lunch income guidelines, are enrolled in another federal anti-poverty program, or are homeless or an orphan. And even at the reduced price, College Board is still charging homeless orphans $62 per AP exam.
According to its 2021 audited financials, College Board generated revenue of $888 million, +15% from 2020. Fee waivers were $69 million (unchanged from 2020), or 7.7% of revenue – comparable to discounts provided by most consumer businesses. In fact, the auditor calls College Board’s fee waivers “price concessions.” College Board’s 2021’s surplus was $278 million. Through successive surpluses, College Board has built a $1.5 billion endowment, currently invested in stocks, bonds, hedge funds, and real estate. Its endowment would rank it about #50 among U.S. colleges and universities. But unlike every one of those universities which spend a percentage of endowment value each year on operations and financial aid, College Board hoards. If College Board were to spend 5% (as foundations are required to do), it would more than double discounts. Of course, with its 2021 surplus, it could have quintupled discounts.
It gets worse. When students take the PSAT or SAT, College Board asks students to check a box to sign up for the euphemistically-named “Student Search Service.” To get students to say yes, College Board dangles scholarships in a multi-level marketing manner yielding a new revenue stream: selling names to colleges. I know because since my 17-year-old took the PSAT, an elaborate mailing from one school or another lands in our mailbox almost every day. In 2019, the Wall Street Journal reported College Board charges $0.47 per name. The axis of College Board and U.S. News has concocted a truly diabolical system: colleges buy more names from College Board to drum up more applications to become more selective in order to move up the rankings; more applications = sending more scores = more revenue for College Board. More mailings are also problematic because they reify college as the only post-high school option; it’s hard to wean American families off expensive colleges when they receive dozens of fantasy messages from them, none from alternatives.
Naturally, College Board disputes they’re selling names, preferring the term “licensing” because – get this – schools can only use the data to promote enrollment, not to sell other products. But according to Consumer Reports, College Board also sells student data to other advertisers. In a comic moment of nonprofit theater, College Board’s annual tax filing describes Student Search Service as “providing a way for [students] to give personal and preferential information to colleges and scholarship programs that are looking for students like them all at no cost to the student.”
College Board acts like a for-profit in other ways. It has for-profit subsidiaries. It’s trying to acquire Carnegie Dartlet, a marketing and enrollment management company with about 350 employees and revenue between $25 and 50 million. It funds an advocacy campaign to stymie the test-optional movement. In an embarrassing moment of candor, College Board once changed its domain from .org to .com. And it pays its CEO over $2.5 million, which would be top 10 compensation for college presidents, just below High Point University’s Nido Qubein. Turns out High Point is the only university in the top 10 with less revenue than College Board. But not even High Point seems to be as rubbing-its-hands-together gleeful about cash as College Board.
At the end of 2021, In a half-baked attempt to head off criticism, College Board announced the establishment of the “ College Board Foundation.” A gauzy video promotes an array of heart-warming goals, but the Foundation’s solutions are all about getting more students to take AP courses: “Policies such as start-up grants for new AP courses, placing AP into career-technology pathways, and funding exam fees for low-income students can bring AP to all students.” It doesn’t appear as though College Board has established the Foundation as a separate entity and it hasn’t reported any endowment or funding allocation. It also has no separate governance or management: the Foundation’s co-chairs are all College Board executives: College Board’s CFO, head of external relations, and the SVP of college and career access. Foundation managers are College Board employees. College Board Foundation is more marketing – one more act of nonprofit theater for a company that should be paying federal and state taxes.
College Board’s CEO is another Dave: David Coleman. This Dave is a brilliant and unique character who’s inspired a hyperactive Twitter parody account showing picturesque campus scenes (“the most beautiful campuses require the SAT for admission!”), making fun of test-optional schools by reporting football scores (“SAT required 59, SAT optional 10”), and lampooning Arkansas (“pretty good spelling for a state with a mean SAT score just north of 860”) and College Board itself (“thank you to all the students who fall for the ‘Can we share your name with scholarship organizations?’ scam on the PSAT”). But some of Dave’s pronouncements don’t require parody, like when he responded to the mass shooting at Marjory Stoneman Douglas High School by praising survivors for making speeches that referenced AP Government and AP U.S. History courses.
Dave could be taking advantage of College Board’s resources to take principled positions, like refusing to back down when colleges attacked his adversity index, by continuing to release AP exam data broken down by ethnicity, or when Ron DeSantis attacked the African-American studies curriculum. But he’s done the opposite, presumably because it’s all about the Benjamins. After caving, College Board was disingenuous enough to assert it hadn’t backed down at all. Which I guess is to be expected from a commercial enterprise that denies it’s for-profit. For-profit Disney, which does real theater, had more courage.
College Board isn’t the first nonprofit to prioritize mammon over mission. ACT has a $300 million endowment. Even the National Conference of Bar Examiners has amassed $100 million. So much taxpayer-supported money flows through higher education, it’s easy for a nonprofit to lose its way. As such, College Board is a metonym for many of its members. Nonprofit colleges and universities are ostensibly about opportunity. But as cost and debt have outpaced employability, opportunity crosses over into predatory.
The problem isn’t limited to higher education; many nonprofit hospitals are notorious for attempting to wring money out of patients. And last fall a New York pastor made news for being robbed of $1M in jewelry in the middle of a church service. Still, it's hard to see how accountability enters the picture in the absence of new rules. Nonprofits almost never lose their tax status. And while directors of for-profit companies have specific responsibilities (“business judgment”), in the absence of shareholders to whom fiduciary duties are owed, directors of nonprofits aren’t responsible to anyone (and only potentially liable for blatant misconduct).
New measures are required to prevent Gresham’s law from taking hold among nonprofits (bad driving out good). States should require nonprofit directors to utilize “nonprofit judgment” and empower state AGs to bring action against nonprofits that play nonprofit theater. The U.S. Department of Education has the right idea with last week’s announcement that it may, in extreme circumstances, require executives and directors of nonprofit Title IV-eligible institutions to sign a school’s program participation agreement (PPA), thereby assuming personal liability for potential Title IV losses. But Title IV funds are an easy case. The problem is that all nonprofit dollars are taxpayer dollars because exempt from federal and state income tax, local property tax, and sales tax on most items.
As many Republican primary voters enjoy nothing more than making holier-than-thou institutions look just as venal as they are, I can even see candidates supporting a private right of action for taxpayers who claim they’re being defrauded by nonprofits using tax-exempt surpluses for non-charitable purposes. Lucky for Dave that the “nonprofit” minting money off America’s obsession with college is based in New York, not Florida. Because I can’t think of anyone who’d enjoy targeting hypocritical higher ed nonprofits more than Ron DeSanctimonious.