I finally decided to work for a university again. Unpaid.

I know. But I remember how isolated I felt as a first generation college student - I would have loved a (slightly) older alumni mentor to guide me through the anxious phases of my career planning. So, after many (many) emails from Duke University, I decided to fulfill my alumni duties and mentor for a few hours.

As fate would have it, I was paired with a senior applying to developmental psychology PhD programs. We talked about career paths in academia and industry, and she admitted that her advisor wasn’t supportive of the latter:

“He hates anything to do with profit.”

One of the most prolific living psychologists - who earns a multiple six-figure salary at a university with a $12 billion endowment - “hates” profit. I laughed. It wasn’t a surprising opinion, but it was a disappointingly uninformed one.

In academia, we’re conditioned to view money as anti-intellectual, believing that our “nonprofit” institutions are morally superior to to those greedy for-profit companies. But this mindset is a serious problem when you want to leave academia for industry. Unless you develop financial literacy, you’ll won't be able to translate your skills in terms that industry hiring managers actually understand.

So, let’s talk about “profit”. Because, contrary to popular academic belief, your skills have immense financial value.

You just weren’t the one benefiting from it.

Business 101 (for PhDs)

Here’s an inconvenient truth: college is not free.

​Money is exchanged, which means that “stakeholders” (the people providing the money) expect value in return. This is Business 101.

What value do stakeholders expect?​

• Students and parents expect universities to provide a degree that opens career doors and increases earning potential
• Governments expect universities to conduct biomedical research, contribute to the economy, and develop a highly-skilled workforce.
• Donors expect universities to use their contributions to fund scholarships, expand programs, or fulfill other goals (fancy named buildings)​

These stakeholders provide billions in revenue for universities. “Revenue” is simply the amount of money brought in by a university’s operations, which is used to pay for various “expenses”. Subtract Expenses from Revenue and you get Profit, alternatively labeled a Surplus in the nonprofit world.

This is what many PhDs fail to understand.​

Just because universities are “nonprofit” does not mean they are losing money. It only means that universities “reinvest” their extra revenue instead of distributing that money to shareholders. This “reinvestment” is why many universities have billion dollar endowments (and pay millions to university presidents and athletic coaches).

Don’t believe me? Let’s dig into some financial data.

A Financial Literacy Exercise

Financial information about your university is available online for free (search your university’s “financial report”). In writing this newsletter, I dug through the 2024 financial report for the University of Washington, where I earned my PhD and was employed as a Graduate Teaching Assistant.

Here’s what I found.

In 2024, the University of Washington generated $9.6 billion in revenue, including:

• Hospital services ($3.1 billion)
• Federal grants and contracts ($1.2 billion)
• Tuition and fees ($1.2 billion)

And they spent $8.5 billion on expenses, including:

• Salaries ($4.2 billion)
• “Purchased services” ($1.3 billion) *
• “Supplies and materials” ($992 million) *
• Benefits ($950 million)

* these terms were not defined, so your guess is as good as mine

You may notice that the university’s revenue is greater than its expenses. According to the financial report, they reported a “net position increase” of $990 million. Call that whatever you’d like, but in corporate terms, that’s a $990 million profit.

‍The University of Washington is not operating at a loss. So why are they refusing to pay graduate workers a living wage, raising tuition prices even further, and unfairly charging students for an in-person education during the pandemic? That’s a discussion for another newsletter.

Right now, all you need to know is that the money is there, it’s exchanging hands, and you’re getting paid.

So, what’s your role in this capitalist machine?

Quantifying Your Value

Your university isn’t just paying you out of the goodness of their heart (sorry). They’re paying you to deliver something of monetary value, and that value is far beyond your compensation.

In my case, I made roughly $3000/month in Seattle - that’s $2000 as a Graduate Teaching Assistant (TA) and $1000 for other odd jobs around the Psychology department to cover my living expenses.

Here's all the monetary value I generated:

• I taught courses, which generated tuition revenue for the university.
• I conducted research, which brought in grant funding (indirect costs) and boosted the department’s prestige, helping the university attract more students (tuition)
• I tutored students in academic writing, which increased student retention and, thus, tuition dollars (and future donor dollars).
• I graded written assignments for courses, which freed up time for faculty to focus on larger revenue-generating activities, like submitting grants.
• I managed the department subject pool, which allowed faculty to conduct research for grant submissions and journal articles.
  ​

This doesn’t even include all the unpaid labor I provided, including four years of organizing recruitment events for prospective graduate students. Don’t get me started on all the journal articles I reviewed for publishing companies…

Now the math gets tricky.

What is the quantifiable monetary value that I generated for my university? Since teaching, research, and service activities overlap and aren't always paid, no clear formula exists to measure an individual’s impact. University financial reports are intentionally vague and obscure this information.

But here are some creative ideas to quantify your impact on (1) tuition revenue, (2) research revenue, and (3) service work:

1. How to quantify tuition revenue

If you taught a course, you contributed directly to tuition revenue. In my case, I was often a TA for Psych 306 (Developmental Psychology). As one of 3 TAs (in addition to the professor), I was responsible for teaching 1 credit hour (20%) of the course. Here’s the math:

• Enrollment: 150 students (~16% non-resident students)
• Cost per 5-credit course: $1441 (residents) | $4801 (non-residents)
• Tuition revenue: $296,790 total * 20% contribution = $59,358

I was personally responsible for delivering nearly $60,000 in instructional services to my university, per course. That’s 10x greater than my $6000/course stipend (and 6.5x higher than the $9000/course adjuncts are paid).

2. How to quantify research revenue

If you secured grants, worked on funded projects, or contributed to published research, your work also had financial value to your university.

If you brought in grant funding, use the total amount awarded. If you assisted on a grant-funded project, estimate your contribution (30% of the work on a $500k grant). If your research led to a patent for licensing potential, that also brings in revenue.

As we’ve seen in recent news, universities rely heavily on “indirect costs” to fund their operations. Your grant isn’t just for your salary or research project. Even on my NIH T32 Postdoctoral Fellowship, which was only intended to pay for my salary, 5% in “indirect costs” went directly to my university.

3. How to quantify service work​

Unpaid service is a feature of academic employment. But your skills have a monetary value, it’s just painful to see how much you could have been paid.

I looked at my CV and cringed at how much work I had done for free. For example, as chair of the Psychology Action Committee, I planned recruitment events every February for four years. An event coordinator would have charged $1000/event for those services​

Other examples:

• Expert Consultants would charge $150-$300/hour to review grants, journal manuscripts, and tenure applications.
• Project Managers would charge $50-100/hour to manage a lab and multiple research projects.
• Freelance Editors would charge $100–$200/hour to edit grant proposals, journal articles, and dissertations
• Career Coaches would charge $150-$300/hour to consult on job applications and professional development​

For every job you completed, paid or otherwise, there was a way to monetize your skills. And although you chose not to monetize those skills in academia, you could (and should) do so in industry.

To “profit” or “not to profit”, that is the question.

​Many PhDs that I coach want to target nonprofits (at first). They can’t imagine how a mission-driven company could generate a profit. But cash flow and tax status are not the same as “purpose”.

The real question is: where does the money go? Patagonia is for-profit but reinvests in climate action. The National Rifle Association (NRA) is non-profit but lobbies against gun control. I run a for-profit business that helps you build a fulfilling career (and life). Universities are non-profits that invest in weapons manufacturing and push young adults into a lifetime of high-interest loan debt. You get the idea. *​

“Non-profit” is a tax status, not a moral status.

If you’re leaving academia, understanding these distinctions isn’t optional. Your skills have monetary value, they’ve always had monetary value, you just weren’t seeing that money. Outside of academia, companies pay well for people like you who can conduct research, manage projects, analyze data, and communicate ideas.

It’s time to shift your mindset.

You’re not “selling out” by making money. You’re just finally being compensated for the value you’ve always created.