For-Profit College Becomes A ‘Public-Benefit Corporation’
Career College Central summary:
Rasmussen College, based in Minnesota, has recently made a transition from a traditional for-profit corporation to a public-benefit corporation, a move that college officials say will increase transparency, accountability, and public service throughout the communities the institution serves. One education-industry analyst said the move might also help the college's relations with its accreditor, which has called on institutions to demonstrate a commitment to the public good.
Becoming a public-benefit corporation is a new model of corporate organization in which a private entity commits to do good for the community as much as increase the wealth of its stockholders. While the model neither puts limits on profits nor guarantees corporate behavior, it is chartered by a state—in this case, Delaware, where Rasmussen is incorporated—to provide a service benefiting the community, a college spokeswoman, Erin Werthman, said.
Rasmussen, which enrolls more than 14,000 students on its 25 campuses in six states and online, offers associate and bachelor's degrees and certificate programs. Its transition to the status of a public-benefit corporation was completed on January 1, a college official said.
Public-benefit corporations are "introducing a values-focused way of doing business," Tom Slagle, the college's chief executive officer, said in a news release. "We are thrilled to demonstrate what is possible when we define success not just on achieving business objectives but also on our ability to use our resources for community good."
In Delaware public-benefit corporations may be formed in the same manner as any other corporation, but their certificate of incorporation must identify one or more specific public benefits. At least once every two years, such a corporation must send its stockholders a statement about the public benefits identified in its charter and its promotion of the best interests of those materially affected by the corporation's conduct.
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