A really interesting section here from Gordon Lafer’s 2003 piece, “Land and labor in the post-industrial university town: remaking social geography” (which Zach suggested to me):
The common sense deﬁnition of “non-proﬁt” is an organization whose income just barely covers its expenses. The designation of universities as non-proﬁt institutions encourages one to think of them as organizations that are modest by nature. Even a school like Yale, which is obviously well endowed, is often imagined to be operating close to the margin, devoting whatever income it generates to the provision of high-quality education and leaving just a small cushion between the university’s costs and its revenues. The truth is that Yale pursues an active policy of accumulating surplus wealth, and that by 1996, its annual earnings exceeded its operating costs by nearly $1 billion.