Monthly Archives: December 2012

The HBCU Endowment Feature – Howard University


391563_10150893820927185_1925738357_n

School Name: Howard University

Median Cost of Attendance: $41 483

Undergraduate Population: 7 164

Endowment Needed: $5 943 684 160

Analysis: Howard University needs approximately $6 billion for all of its students to attend debt free annually. Howard University is in pole position to become the first HBCU to reach the billion dollar mark. The school has historically had a very dedicated alumni base that has translated into consistent giving which for compound interest reasons can be more important than inconsistently larger donations. The only full service HBCU with both a law and medical school, it has at its disposal a higher income bracket of graduate school alumni than all other HBCUs. This provides a significant advantage in its fundraising. It does not hurt that the school is located in the nation’s capital where many federal funding decisions are made. Washington D.C. also being the home of one of the strongest African American populations in terms of social, economic, and political capital. One mistake that could be made by its alumni and university however is being content. Spelman and Hampton are closing the gap rapidly and on the more macro scale Harvard is widening the institutional gap between African America and European America’s top universities. Resting on its laurels could be fatal especially as Howard continues to be one of the most expensive colleges, HBCU or not, in the country. Howard, not becoming dependent on the tuition revenue that its higher cost of attendance brings is vital to keep in the forefront of the development office. Making families and communities feel good about the investment they are making and reducing the burden should be at the forefront of their alumni so the school can continue to recruit the cream of the crop in academic talent which translates into wealthier alumni on average. Ultimately, it is hard not to see Howard University becoming the first HBCU to achieve a billion dollar endowment with its healthy dose of donations and consistently high investment returns. It appears inevitable with the only thing that can get in its away is itself, but the competition to a billion will be fierce make no mistake about it.

As always it should be noted that endowments provide a myriad of subsidies to the university for everything from scholarship, faculty & administration salaries, research, and much more.

Advertisements

HBCU Money™ Business Book Feature – Inherently Unequal: The Betrayal of Equal Rights by the Supreme Court, 1865-1903


unequal

A potent and original examination of how the Supreme Court subverted justice and empowered the Jim Crow era.

In the years following the Civil War, the 13th Amendment abolished slavery; the 14th conferred citizenship and equal protection under the law to white and black; and the 15th gave black American males the right to vote. In 1875, the most comprehensive civil rights legislation in the nation’s history granted all Americans “the full and equal enjoyment” of public accommodations. Just eight years later, the Supreme Court, by an 8-1 vote, overturned the Civil Rights Act as unconstitutional and, in the process, disemboweled the equal protection provisions of the 14th Amendment. Using court records and accounts of the period, Lawrence Goldstone chronicles how “by the dawn of the 20th century the U.S. had become the nation of Jim Crow laws, quasi-slavery, and precisely the same two-tiered system of justice that had existed in the slave era.”

The very human story of how and why this happened make Inherently Unequal as important as it is provocative. Examining both celebrated decisions like Plessy v. Ferguson and those often overlooked, Goldstone demonstrates how the Supreme Court turned a blind eye to the obvious reality of racism, defending instead the business establishment and status quo–thereby legalizing the brutal prejudice that came to define the Jim Crow era.

HBCU Money™ Dozen Links 12/24 – 12/29


Did you miss HBCU Money™ Dozen via Twitter? No worry. We are now putting them on the site for you to visit at your leisure.

Government Departments

$60B in Sandy aid clears Senate l Senate News http://bit.ly/TLm9lC

Coming in 2014: Death by Internet l GCN http://bit.ly/VUCiQd

Study reveals religion plays key role in preserving Vietnamese American ethnic identity l NSF http://ow.ly/gpZMQ

House Dems Will Seek to Ban High-Capacity Magazines on Jan. 3 l House News http://bit.ly/VcoqlH

Learn more about the work of Phil Colarusso EPA diver and marine biologist l US EPA http://1.usa.gov/12pykWw

Pres. Carter signs Clean Water Act of 1977, amends Water Pollution Control Act of 1972 l EPA http://go.usa.gov/gFvd

Federal Reserve, Central Banks, & Financial Departments

Leveraging Resources for Small Businesses in #Detroit l Chicago Fed http://ow.ly/gpZQD

Sales of new single-family homes rose in November l Cleveland Fed http://ow.ly/gpZRh

By 2050, 80% of world’s older people will live in developing and emerging economies Infographic l World Bank.http://bit.ly/WN1R8v

Are China’s fast-rising housing prices the reason for its high household savings rate? l St. Louis Fed http://bit.ly/RcQEfp

How easy is it to start a business where you live? #DoingBiz l World Bank http://ow.ly/gpZUc

Chart: Average interest rate on a 15-year fixed-rate #mortgage remains at 2.65% l St. Louis Fed http://bit.ly/V7gl1N

Thank you as always for joining us on Saturday for HBCU Money™ Dozen. The 12 most important government and central bank articles of the week.

 

The HBCU Money™ Weekly Market Watch


Our Money Matters /\ December 28, 2012

NAME TICKER PRICE (GAIN/LOSS %)

African American Publicly Traded Companies

Citizens Bancshares Georgia (CZBS) $4.50 (UNCH)

Carver Bank New York (CARV) $4.06 (2.17% DN)

Radio One (ROIA) $0.75 (UNCH)

African Stock Exchanges

Bourse Regionale des Valeurs Mobilieres (BRVM)  165.14 (1.03% UP)

Botswana Stock Exchange (BSE)  7 510.24 (UNCH)

Ghana Stock Exchange (GSE)  1 188.28 (22.63% UP)*

Nairobi Stock Exchange (NSE)  94.78 (N/A)

Johannesburg Stock Exchange (JSE) 39 385.04 (0.11% DN)

International Stock Exchanges

New York Stock Exchange (NYSE) 8 338.45 (0.74% DN)

London Stock Exchange (LSE)  3 105.01 (0.45% DN)

Tokyo Stock Exchange (TOPIX)  859.80 (0.67% UP)

Commodities

Gold 1 654.50 (0.551% DN)

Oil 90.91 (0.04% UP)

*Ghana Stock Exchange shows current year to date movement. All others daily.

All quotes reported as of 3:00 PM Eastern Time Zone

20 Years Later: Bill and Camille Cosby’s Great HBCU Gift – But Is Hope Lost?


By William A. Foster, IV

“We must claim and therefore support those institutions at the heart of our peoplehood.” – Dr. Johnetta B. Cole; Former President of Spelman

"Fat Albert" Block Party

If one takes a walk on the campus of Brandeis University, a secular European Jewish institution, in Waltham, MA right outside of Boston they will notice a name that appears numerous times on buildings throughout the campus. That name is Carl & Ruth Shapiro. It is almost comical to ask someone to tell you where the Carl & Ruth Shapiro building is without getting a response of “which one?”. A student was once noted as asking Mr. Shapiro why he gave so much to Brandeis, a school he nor his wife ever attended, and it is said he simply replied that he was Jewish, the school is Jewish, and he wanted it to be the best representation of himself and the Jewish community. When I first was told about this exchange it sent a tingle down my spine. Primarily, I wished African Americans as a whole had the same love and tenacity of supporting our own institutions regardless of whether they had attended an HBCU or not because whether they like it or not what they produce reflects and is a reflection of us all.

It would be twenty years ago last month that Bill and Camille Cosby would be the example of just what that love and tenacity could look like. Their donation to Spelman College would catapult it into the pantheon of HBCU endowments and put it on path to become what is now the second largest HBCU endowment behind Howard University. Their $20 million donation in 1988, equivalent to roughly $40 million adjusted for inflation in today’s dollars, still stands as the largest donation by African Americans to a college or university. An amazing feat for Spelman College who at the time only had a $42 million endowment and is now in a viable position to become the first African American college to reach the billion dollar endowment mark. That neither Bill nor Camille Cosby had attended an HBCU, although her father attended Southern and Fisk while her mother attended Howard, speaks much to their understanding of building African America’s institutional power not just individuals. At the time the Cosbys’ made it clear that they were not only supporting Spelman College but that they were throwing down the gauntlet to other African Americans in a challenge to truly support African American colleges and universities and give them the resources they had been long deprived of by state and federal governments as well as the abandonment by the African American private community since the late 1960s. The African American community’s support waned as desegregation took root and the Civil Rights Movement leaders convinced African America that equality meant not access to equal funding to build up our institutions but abandoning our institutions to build up European American institutions. A failed strategy still prevalent in almost every sector of African American life even to this day.

Sadly, it is twenty years later and while Spelman College is in the hunt to become the first African American college or university with a billion dollar endowment the challenge presented by the Cosbys’ to African America was largely never answered. The numbers suggest that there should be multiple HBCUs with billion dollar endowments amongst the ranks now, but as it stands just being in the $100 million endowment club is the air of HBCU endowment glory of which we only have 5 while an estimated twenty percent have no endowment at all according to AK Research. Of the 100 plus HBCUs that are left in existence, they share an estimated $2 billion in combined endowment value with the top ten HBCU endowments holding a disproportional $1.5 billion of that value. It also appears that of the HBCUs in contention to become the first to reach the billion dollar mark, none are less than a decade from achieving the mark. Truly a problematic notion with the rising cost of higher education and a far cry from something that could have been achieved over a decade ago had the challenge been answered.

The wealth disparity between African Americans and other groups is so pronounced (and widening) it limits our ability to give in larger amounts. African America lost eighty three percent of its wealth in the Great Recession making a complicated situation even more so. That five percent of gifts account for eighty percent of endowment giving, large donors play an enormously important role in building a college’s endowment. However, there is only one African American who has the known net worth to match Gordon and Betty Moore’s $600 million donation to California Institute of Technology in 2001, which is the largest donation ever given to an American institution of higher learning. That person being Ms. Oprah Winfrey, who has been an avid supporter of HBCUs and especially of African American male achievement being a primary donor to Morehouse College. As a percentage of America’s wealth elite, African Americans comprise one-fourth of one percent of the Forbes 400 wealthiest Americans. In fact in order for every HBCU to receive just a $10 million infusion would be well over $1 billion. The 20 richest African Americans have a combined net worth of approximately $9 billion while the 5 richest European Americans have approximately $235 billion. Yes, the disparity is that great.

Bill and Camille Cosby’s gift twenty years ago brought a hope and optimism that a donation by arguably the most popular African American in America at the time would have spurred six, seven, and eight figure investments in our institutions of higher education by more of our well to do African Americans seems all but lost today. Simply put we have arguably reached a point that without the buy in of African Americans (and African Diaspora) who never attended HBCUs as donors we just simply do not have the number of alumni or individual wealth to usher in a new age of HBCU growth without losing control of the institutions themselves to others.

Where and who are today’s Bill and Camille Cosby? It is honestly hard to say. Their education obviously ensured that their value toward formalized education would always be a central value in their lives and philanthropy. Is it Shawn and Beyonce Carter? They have the economic means and social standing in African America that a donation from them would be impactful way beyond the financial impact but hard to say it would generate any more of a ripple than the Cosby donation a generation ago. In fact in this post-racial era, high profile African Americans stand a grave career risk attaching themselves to anything perceived as “too” Pan-African or empowering of the African Diaspora. However, when easily over ninety-five percent of African Americans at HBCUs are dependent on financial aid and HBCUs are still the predominant producer of degrees for African America sitting idle is not an option for those that can.

Since the Cosby donation there has been only 1 eight figure donation to HBCUs. It would come from Reverend Solomon Jackson, Jr. who gave $10 million to Morris College after winning the Powerball lottery. Unfortunately, if we plan on waiting for lottery winners we are truly in a lot of trouble. While it is true that we need alums to pick up the giving pace we can not be unrealistic that African Americans have wealth 50 times less than our counterparts. Like President Obama calling for tax increases on the rich, we too must call on those African Americans who can afford to shoulder a little more load to ensure future generational wealth is more evenly spread amongst us to sacrifice and do so. It is still truly amazing that the Cosby gift transformed the lives of so many African American women, families, and communities and given at a time when the Cosby family themselves had not reached anywhere near the zenith of their wealth. They realized it was an imperative that could not wait. Their gift was a fire from a match now flickering and almost out but with still enough flame left – what we need now is a wildfire.