After reading Declan Butler’s shocking report about the impending doom of PLoS, I became very concerned about the future of non-profit organizations in America. As Butler rightly points out:
Since its launch in 2002, PLoS has been kept afloat financially by some US$17.3 million in philanthropic grants. An analysis by Nature of the company’s accounts shows that PLoS still relies heavily on charity funding, and falls far short of its stated goal of quickly breaking even through its business model of charging authors a fee to publish in its journals. In the past financial year, ending 30 September 2007, its $6.68-million spending outstripped its revenue of $2.86 million, according to the publicly available accounts.
My goodness! PLoS has received $17 million in grants! This is obviously a signal that things are going badly for the revolutionary open-access publisher. They’re resorting to handouts! When a charitable organization continues to earn the respect of more and more foundations, increasing its bottom line year after year, it’s clearly a sign of impending doom!
But what of the other esteemed organizations in America? If doomsday is nearing for PLoS, then perhaps other non-profits may soon suffer the same fate. I took a look at Harvard University’s most recent annual report, and just like PLoS, I saw the same worrisome signs: Of Harvard’s $3.1 billion in expenditures, a mere $657 million came from student revenue such as tuition, room and board. Just like PLoS, Harvard is looking for handouts. For example, a whopping $641 million came from government and institutional grants.
Even more troubling, this represents an increase over the $634 million in grants Harvard received the year before. Just like PLoS, they’re getting more and more handouts each year.
But even that doesn’t cover Harvard’s expenses — Harvard has had to dip into investment income and even its endowment assets for another $1.4 billion, and it’s needed to resort to charging rents, student fees, and charging for access to its intellectual property to cover the rest.
Clearly this demonstrates that Harvard is in dire circumstances, just like PLoS. Don’t let Harvard and PLoS’s impeccable reputations fool you. When granting institutions and other donors want to give non-profits large sums of money, it’s a sign of their inevitable decline. Fortunately we have private institutions like Nature, the University of Phoenix, and DeVry University to take their place.