Does Stanford Provide a Public Good?

Originally published in the Stanford Daily as part of a column series known as Adventures in Academia that explored issues related to the Stanford University community.

A few years ago during those quaint stock market boom years, there was a debate in Congress over the value of elite college institutions in America. Senator Charles Grassley, the chair and later ranking minority leader of the Senate Finance Committee, attacked well-endowed schools like Stanford who bring in enormous income from fundraising and investments yet continue to aggressively raise tuition.

During that time, he brought into clarity an important question that an institution like Stanford must continually answer: how well are we serving the public?

For Stanford, there has been an obligation to assist the public interest from our very founding. As part of the founding grant, Stanford's mission is "… to promote the public welfare by exercising an influence in behalf of humanity and civilization." Thus, the question posed goes directly to the core mission of the university.

Stanford is considered a non-profit educational institution, and thus does not pay taxes on endowment income or alumni donations that would amount to millions of dollars lost per year. The university also receives federal research grants totaling a little less than a billion dollars per year. These enormous subsidies make Stanford accountable to the public.

The legitimacy of the question is clear, but how to measure public interest is not. A complex institution like a university cannot be pigeonholed into a couple of metrics, regardless of what the editors of U.S. News would have us believe. A further question to ask is whether Stanford must excel in every area with regard to the public interest, or whether it can excel at some and not others.

Evaluating Stanford by its own arguments is enlightening. The university writes an economic impact report each year to demonstrate its benefits to the local Bay Area community. Last year's study concluded that a little less than $4 billion was spent by Stanford, most in the local area. There is also tens of millions of taxes collected from utilities and sales taxes that go directly into the coffers of local and state government.

Stanford does indeed spend a lot of money. Does that mean the university is in the public interest? No, since every major multinational company also spend liberally. I am fairly certain that companies like Google and Sun Microsystems are helping the local economy too, and they pay taxes (or should be). The notion that Stanford should not be taxed because of its spending fails logic.

Perhaps Stanford's efforts to bring underserved communities to campus through admissions and provide strong financial aid to those who need it is the way it accomplishes a public service. In its most current numbers, a little less than half of students received Stanford financial aid and almost 15% of the newly admitted class were first generation college students.

Those are both strong arguments, but they only work if one ignores the comparative numbers. Stanford enrolls 12.8% of Pell Grants, in line with peer institutions like Harvard. At public universities like UCLA and Berkeley, almost 40% of students receive Pell Grants. Stanford's outreach to low-income communities is appreciated and important, but the argument that this defines Stanford's public benefit is not fair.

A more targeted argument would focus on Stanford's quality of education. The school provides one of the best educations in America, creating the leaders of the future. This is an argument that works throughout the different schools as well as at both the undergraduate and graduate level. Not only is the education top-notch, but high levels of aid allows graduates the freedom to pursue public service careers - a freedom not available at every school in the nation. Too bad so few graduates go into public service.

All of these arguments are true to a degree, but lack definitiveness. That argument is Stanford's drive for original research. As fewer companies support the kind of basic research that underpins many of their products, it is left up to scientists at research universities and institutions to fill the gap. Few places can handle the level and depth of research like a university, and Stanford is almost without peer in the level of its research. It also helps that a myriad of recognizable companies were started here as well.

Making that argument to the public needs to happen more often. Senator Tom Coburn recently proposed eliminating National Science Foundation grants to political science. Even politicians are not seeing the benefit of some research.

Meeting the demands of the public is not easy - nor should it be. Stanford has done a solid job using the public trust (perhaps the research scandals of the early 1990s helped). The university does not excel in every criteria, nor would meeting every criteria validate Stanford's utility. In the end, Grassley was pleased enough from university responses to avoid pressing for legislation. Let us continue to engage and inform.