ECON 252 - Economics of Not-For-Profits

This course focuses on the economics of not-for-profit institutions. The course will deal with both underlying theoretical concepts and their applicability to actual nonprofits. The course will be broken down into three components: (1) A rather deep overview of the nonprofit sectors of the US economy. Their history, evolution, trends, and possible future; (2) Macalester College (and other selective LA colleges) as a nonprofit; and lastly (3) How to actually start your own nonprofit. After our introduction, the college will actually provide the basic framework for the course. Using the tools of economic analysis acquired in the Principles course, we will examine the mission/purpose/aims of the college and how they relate to governance (the interplay between the Board of Trustees, the President and his/her staff, the various faculty/staff committees, students, and other constituencies); planning and goal setting; resource allocation (both operating and capital budgets); the interplay between human capital, financial capital, and physical capital; agency matters and incentives; and the issues that must be confronted in deciding whether to spend more from the endowment now vs later. We will also study how not-for-profits tend to self-evaluate their progress and how external evaluating methodologies (eg U.S.News) might influence all of the above. During the portion of the course wherein we focus on Macalester, we will often analyze the same matter found at other selective, national liberal arts colleges, including Swarthmore, Carleton, Grinnell and Pomona. This course counts as a Group E elective. Prerequisite(s): ECON 119. C- or higher required for all prerequisites. (4 Credits)