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Honest question: what is the difference between a “for profit” school and one that ends the year with more than that it started with? If Harvard manages itself such that its endowment increases, is this not a profit? What is the practical, operational difference?

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For profit schools have shareholders/members who are privately entitled to the equity that accumulates. They generally will have to pay some form of taxes (income, capital gains, etc.) on that leftover. Non-profit institutions like Harvard have received a federal exemption from most US taxes, provided that they continue to pursue their stated purpose and jump through some hoops. No individuals are legally entitled to Harvard's endowment.

"For profit" vs "non profit" describes the ownership structure of the organization, not what happens on its financial statements. If a for profit school makes a profit, it has the option of paying out a dividend to its shareholders. If Harvard makes a profit, that profit must remaining within Harvard; there are no shareholders that the profit could be distributed to.

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