‘‘Daddy, buy me a microfridge company, NOW!’’
It may sound unlikely, but it’s a request made with varying degrees of extremity by participants in Campus Enterprises (CE), an organization at Duke that enables students to be shareholders and directors of their own businesses. But CE prompts an ethical question: does its mandatory $7,000 buy-in investment in the company promote and sustain elitism?
While CE’s Prospectus discusses the long hours and hard work necessary to promote their brand, the hard truth is that the organization could not achieve success without a big fat check from mom and dad. This brings to mind an old adage: he was born on third base and thinks he hit a triple. In the case of CE, the $7,000 buy-in allows shareholders to advance several bases from the get go. They certainly don’t start in the batter’s box.
This is not to say that the students who run CE do not work tirelessly to promote their company. How many Instagram stories of sushi rolls and storage boxes have you seen in the last few weeks?
In theory, the shareholder investment is useful in some respects. Having “skin in the game” is an incentive for CE participants to be more conscientious in running their business. When they field a complaint about a loose mattress spring, their financial stake in the enterprise is a motivation to be more responsive.
But do they really have skin in the game? One has to wonder how many CE shareholders actually saved that $7,000, perhaps by lifeguarding the kiddy pool or deep-frying Chick-fil-A patties. Although there are no hard numbers on this, it stands to reason that parents, not college students, forked over the money.
It’s a huge privilege to step into an established business at the level of CE, instead of working one’s way up from the bottom. A typical aspiring entrepreneur must build a business from scratch, rising up from humble beginnings. She must start out on the ground floor, working as a barista by day to support herself and fund her start-up. Alternatively, she may create a persuasive and enticing Kickstarter campaign, seeking money from strangers who are willing to invest in her fine-tuned business model.
Meanwhile, CE participants are afforded the luxury of just calling home, or maybe even texting Dad to Venmo them $7,000. They enter a lofty realm, where they can run a business at the mere age of 19 without having much to lose.
Like many things in life, if we’re honest with ourselves, it is elitist, even if we would like to be a part of it. CE participants will develop business skills and acumen, which are to be envied. As a matter of full disclosure, my application to join CE was rejected.
Given the wide range of socio-economic backgrounds at Duke, the $7,000 buy-in is a pittance for those at the upper end of the economic ladder and a fortune for those at the bottom. Consequently, the buy-in tends to winnow the pool of potential applicants to those with more resources. To their credit, CE recognizes that a costly buy-in is problematic and is taking steps to make the organization more egalitarian.
Asked whether the investment tends to draw more affluent participants, CE’s Chief Executive Officer Josh Young candidly replied, “It does, and that’s why we’re really trying to lower it... Our goal is to continue to bring it down over the next 5 to 10 years until it’s close to $0.”
At one point, CE’s shareholder price was over $10,000, which Young acknowledges was not reasonable for college students to afford. Although CE would like to eliminate the buy-in, a shareholder investment is still necessary at the moment so that current members are reimbursed with at least the same amount that they paid to buy in.
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According to the CE Prospectus, “In 2019, we have committed to reducing the share price to $6,500. This is the price incoming shareholders of the Class of 2022 will pay to join the company.” However, that did not happen. The final share price in 2019 was $7,000, the same as it was in 2018.
Ironically, one reason that the buy-in was not lowered was that CE gave out more financial aid than ever before to subsidize the buy-in for accepted applicants, who were unable to make the investment. Refunding the buy-in to graduating seniors and providing financial assistance to new members required revenue, foreclosing any lowering of the buy-in.
Young said, “We offered financial aid to six out of the 15 that got in… We gave out… almost $30,000... which is a pretty large amount.”
The CE Prospectus says, “Please state on your application in the additional information section if the share price is prohibitive so that we can plan ahead to accommodate. This will not affect our consideration of you as a candidate.”
According to Young, the reading of the application is need-blind. But how exactly is “need-blind” defined? Does it mean that financial need will not be a factor, or that the admissions committee will be completely unaware of applicants’ financial status?
It’s obviously not the latter, because the Google Doc-based application has no way of filtering mention of financial need. But since it’s in the application, how could financial need not be a factor in the decision-making process, even if only subconsciously or through implicit bias?
Young explains that after the third-round interview, applicants were again asked whether they would need financial aid for their buy-in, and that these responses were not considered on decision day. Although only two students had mentioned financial need in their initial application, several more requested aid at this later stage.
This is evidence that applicants sensed disclosing financial need might be disadvantageous to their prospects of acceptance. This reluctance to ask for aid is further proof that the $7,000 buy-in restriction deters qualified candidates from applying.
For some, asking a parent for $7,000 is no less conceivable than asking Daddy to buy a microfridge company. For others who can afford participation, not only declining to participate, but also boycotting CE’s products and services is the best way to express disapproval. This is not a knock on the qualifications of those selected for CE. It’s an observation about the quality of all the people excluded by virtue of the buy-in.
Lena Yannella is a Trinity sophomore. Her column, “the unlicensed ethicist,” runs on alternate Tuesdays. To submit an ethical quandary, shoot her an email at email@example.com.