It’s a non-profit because the investments, the real estate, the patronage jobs, and the shortchanging of staff all serve the institution itself. Surplus enables it to expand or execute better on its mission. A rich dude can’t invest in the university hedge fund and then redeem for a suitcase full of cash. Only the university itself can do that, and instead of a yacht it’s going to buy a research vessel, and instead of hosting kickass parties it’s going to study fish. And if hiring the customs inspector’s son gets it out of port faster, then so be it. But overpaying for custodial services isn’t going to get the fish studied any better.

Economic inequality is an important problem but it’s not the only problem. It’s okay to sometimes accumulate and deploy funds to other ends.

Universities don’t act like specific cost centers of governments, they act like governments.