The University of Pittsburgh is a university, a non-profit institution advantaged in myriad ways because of its tax breaks as a non-profit. It is categorized, in fact, as a charity. Are you with me so far?

The person who runs the university’s hospital makes six million dollars a year.

Does that sounds like an appropriate use of tax-payer money? Like a non-profit salary? Or are you smelling just the slightest whiff of profit motive in this figure? Throw in private jets and chefs and chauffeurs and all and you begin to understand why the city of Pittsburgh is suing the hospital, and why this trend – suing so-called non-profits to make them act like (and share like) the for-profits they are – is becoming national.

But local Pittsburgh politics aside, large non-profit health systems are getting new attention from city and state tax officials across the country facing budget crises. “The fact is hospitals are coming under more scrutiny,” says Gary Young, director of Northeastern University’s Center for Health Policy and Healthcare Research. “The city’s willingness to take on a hospital with the cachet that UPMC has is sending a chill down the spines of many hospitals around the country who are saying, ‘If this is happening in Pittsburgh, what could happen with us?’”

I remind you of all this in connection with the public relations problems NYU is currently facing, as its administrators and some of its faculty help themselves to vacation houses on their students’ – and the taxpayer’s – dime.

For what it’s worth, here’s what I think part of the problem is.

The trend toward packing your board of trustees with Olympians like Steven A. Cohen (personal wealth nine billion dollars) and just down from there is that you as an administrator now hobnob on a regular basis with such people. Study after study tells us that perceptions of one’s financial success are profoundly dependent on the financial profile of the people in your neighborhood, at your workplace. It’s all comparative.

Your attitude toward personal wealth thus shifts as hedge fund managers become the new normal on campus. Your one million dollar a year compensation becomes downright embarrassing. Infuriating. What to do?

You convince yourself you can’t attract the mega-rich and their money to your campus without dressing, talking, and living like them.

You’re not being greedy; on the contrary, you’re doing high-minded work on behalf of the university by styling yourself a financial titan on the same level as your trustees.

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One saw this process very clearly on the Yeshiva board of trustees when Bernard Madoff and Ezra Merkin – men of unimaginable personal wealth – walked as gods among the administrators there. Fellow trustees and high-ranking administrators at Yeshiva fell over themselves to be cut into Merkin/Madoff deals. These people used to think they were rich. M and M showed up and showed them they were poor. “We thought he was God,” says Yeshiva trustee Elie Wiesel of Bernard Madoff.

So, you know, a rising tide lifts all boats. If the water level is one billion dollars in personal assets, everyone’s going to want to rise to that. It won’t seem strange to them – it doesn’t seem strange to NYU – that multi-million dollar vacation homes would be part of a university compensation package. I mean, by prevailing standards, that’s nothing! That’s the bare minimum.

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This is all well and good – this rising tide business – until people who actually know what non-profits are — or people who realize they are giving their tax money to university robber barons — themselves begin to rise up.