Dive Brief:
- California's Alliant International University recently made the jump from nonprofit institution to "for-profit benefit corporation."
- A number of other universities are expected to follow suit, forming a system of health sciences institutions dubbed "Arist Education System," according to Inside Higher Ed, which also reports that Alliant International may be the first regionally accredited nonprofit institution to become a for-profit benefit corporation.
- The university has no endowment and was said to be operating on a "pretty well broken" business model by its president, who added that it failed to institute long-term changes that would have sustained it.
Dive Insight:
Program expansion was among the short-term changes attempted by the school, which even tried selling a building, which it then leased back. The new system it will be a part of, Arist, is owned by German media firm Bertelsmann and received initial funding from University Ventures. For a college or university, the idea behind becoming a benefit corporation is that an institution's social mission remains protected and it remains publicly accountable while also taking private funding.
It will be interesting to see how this model pans out in comparison to other for-profit institutions.
