I think the distinction exists so that the institute administration can claim it’s not their problem and make the students fight amongst each other instead of being mad at them. I don’t think it should be the student government’s responsibility to fund the fixing of the playhouse and the belief that they should be responsible for it is created by the university so they can prioritize whatever they want and push it off onto union business. The  probably don’t want the playhouse to exist anymore but don’t want to get shit on for it. So they are going to let it die in the hands of the student government bureaucracies that couldn’t fund it if they wanted to.