Alliant International University, which houses APA-accredited psychology programs and COAMFTE-accredited family therapy programs, announced last week that it has converted from a non-profit corporate structure to a benefit corporation, a new type of for-profit structure allowed in California and at least 26 other states.
Like many private nonprofit universities, Alliant had spent several years engaging in significant cost-cutting measures like freezing faculty pay, reorganizing staff, and deferring maintenance. The conversion to a benefit corporation structure will allow the university a sorely needed infusion of cash, as it is becoming part of the Arist Education System, a group of universities investing in health care programs. Arist is backed by German publishing giant Bertelsmann.
Of course, investors expect a return on their investment, which creates a natural tension in any university setting. For-profit universities are often accused of having shady marketing and recruiting practices and low admissions standards. Alliant has made clear it hopes the benefit corporation structure will offer it some protection against this tension, as benefit corporations have a legal obligation to protect their mission even when it means profitability suffers. The benefit corporation structure has received positive coverage at The New Yorker and NPR for its ability to provide investors with returns while allowing an organization to remain fundamentally mission-driven.
The impact of the transition on Alliant students, faculty, and staff will take some time to shake out, to be sure. What is clear, however, is that Alliant will not be the last university to make such a move. Tuition-driven, private nonprofit universities are struggling to survive. Fewer students are choosing to go to such schools, likely due in no small part to their high price tag and students’ increasing desire to avoid what could otherwise be massive student loan debt. If Alliant’s transition goes well, it may hasten other universities’ similar conversions by serving as a positive example. But even if it doesn’t, the pressures on private non-profit universities will not go away. Inside Higher Ed has a good discussion of Alliant’s transition, including both pros and cons.