Category Archives: Editorial

The Cultural Danger Of Covid-19: A Devolution Of Intellectual Progress


By William A. Foster, IV

“A man only learns in two ways, one by reading, and the other by association with smarter people.” – Will Rogers

I am rarely one who likes to write qualitative pieces over quantitative ones, but for the moment I am going to make an exception. I can give you numbers about how the economy is suffering and is going to continue to suffer for the foreseeable future. I could give you the number of cases, deaths, lack of PPE numbers, and percentage of overworked medical and essential workers. I could go on and on and on with numbers, I am economist after all, but here is the reality of all those numbers – they are bad, real bad, and will be bad for sometime to come. Instead, what I would like to discuss is an acute qualitative cultural loss we may potentially experience and perhaps give us an opportunity to think about what this very new world could look like that we are about to embark upon if we are not proactive in maintaining a core essence of our humanity.

The world we are entering will be far more online and far more physically distanced from each other both on a micro level and global macro one. Everything from work, school, and socializing. Many would argue that online college is the way of the future. This maybe true, but people forget one of the most critical components of college in person is the social aspect, the relationship building that simply can not currently be replicated online. A few decades ago, I was a freshmen at Livingstone College in Salisbury, NC and there I would meet my three best friends that I am sure will be that for the rest of my life. Our meeting was happenstance. None of us had the same major, personality, or interest. We called ourselves the Variety Pack because nothing about us was alike, but alas, we found each other, bonded, and formed a brotherhood that has stood the test of time. For all the differences of course, two of us did share the same Algebra/Trigonometry class. The class was an 8AM class and the pain of getting up for it when you are not a morning person can not be overstated in my case. However, myself and Rashad, the one of the said Variety Pack with whom I had the ungodly morning class with, loved to sit up and debate theology many nights. Rashad was/is a devout Christian. I on the other hand am something of a spiritual nomad you might say, but am fascinated by the intellectual aspect of religion. One particular night in our dorm hallway we got into one of our intense discussions and the hours clearly raced by because before we knew it the sun was rising. Sleep? Forget about it. We both agreed we would get ready and meet for breakfast and try our best to stay up through class. Moments like these and many more are what built our bond and there is simply no way to replace it online. People from different backgrounds meeting, sharing an experience, bonding, learning from each other, evolving, and developing their understanding of the world.

Simply put, COVID-19 has the potential of sending us back to the dark ages in terms of cultural evolution and development. Thousands of students who study abroad every year will no longer get to do so. Student exchanges, especially from China and Asia in general, will be looked at with heavy skepticism if considered at all. Americans, who are already known to be culturally hubris and inept, often failing to travel much and experience culture even within the United States will be even more isolated. Tourism and vacations that allow us to experience distant lands and bring back with us new ideas will be vastly reduced. Academic tourism for professors who may themselves spend time as visiting professors at different universities will be greatly hampered. Cultural developments like fusion cuisines from different parts of the world will retrench and much more will simply begin to deteriorate. The rise of intellectual incest, a term I use when someone or an institution is only receiving ideas from the same petri dish of thought. If a student receives all of their degrees for instance from the same institution, this would be an example of intellectual incest. Because the world is now going to shrink itself in an effort to protect itself, there is a unknown danger that may start to form. We have seen the world where people are exposed to different cultures, ideas, and ways of life and we have seen a world where people are isolated and xenophobia forms out of it.

The danger that we become a less tolerant, less compassionate, less understanding, and less intellectually evolved is a real possibility that could have far reaching societal implications for future generations. In a world where terroristic nationalism has been on the rise in far too many countries, COVID-19 may give many the “pass” they have been looking for to justify retrenching from a world that was evolving and developing towards efficiency of its intellect. Sharing best practices the world over is something we need more of and not less. This is by no means to say we were in Utopia. I do not believe in Utopia and not sure I would I enjoy living in it. Conflict has its place within measure in a society. Disagreement has its place within measure in a society. My Global Economic Environment professor, Dr. Catherine Mann, taught me years ago in business school that if you do not truly understand your opposition’s position, then you can not truly understand your own. To this day she is one of the most brilliant and wisest people I have ever met and there is an acute truth in what she said. How does one know their position is best if they have nothing to compare it with? Plan A maybe good, but an objective view of Plan B may allow it to have tweaks made to it that can make it great or perhaps it is Plan AB that is great. Without that engagement, we will be taking steps back in the interactions that create evolution and development of thought.

I am not sure when we will come out of this state we are in and I am not sure how we will be when we do. What I do know is that fear can drives even the fiercest animals into hiding and that fear for humans could undo hundreds of years of intellectual progress. Great ideas will become fewer and farther apart if that is true. The grand ideas of humanity like cleaning up pollution, reaching Mars and beyond, eliminating poverty, and so many more will take hundreds of years longer to accomplish than they otherwise would have. Yes, the world has forever changed and we will have to interact with each other differently, but make no mistake about it, we must continue to interact. Can you imagine a world where peanut butter never met jelly? Neither can I and I do not want too.

HBCU Money™ Turns 8 Years Old


By William A. Foster, IV

“Patience is not simply the ability to wait – it’s how we behave while we’re waiting.” – Joyce Meyer

Are we there yet? Any adult remembers asking this as a child and any parent remembers hearing this from a child. The trip could be to the grocery store or a road trip. Sometimes we think children are being impatient when it could be they are just excited and ready to explore all that awaits them at their destination. For myself and the building of HBCU Money, we are that metaphorical child.

Expecting to be much further, bigger, and covering far more ground by now. My HBCU Alumni Owned media contemporary Steven Gaither of HBCU Gameday recently put it best in a tweet, “Just because HBCU Gameday doesn’t show up at your school consistently doesn’t mean we are biased or hating. We don’t have the resources (manpower and money) to provide the same level of coverage for everyone consistently.” That really hit home for me. Steven and his team have been doing amazing work and have built an amazing following in a very short period, but like most HBCUpreneurs there is little in the way of resources available. We are often competing with major media and asked to cover our subject matter with the same level of quality all while doing it with 1/1000th of the resources. And yet, we know the work must be done and we will continue to do it. HBCU Money, HBCU Gameday, HBCU Digest, and other HBCU Alumni Owned media is not a luxury to our ecosystem, it is a necessity, imperative, and vital. The HBCU narrative, all of it from the good, the bad, and between absolutely must be controlled by those who know, love , and want to see the very best for our institutions.

In HBCU Money’s eighth year there is significantly more building to be done. The hiring of HBCU journalism graduates, YouTube channel to launch, acquisition of radio and television station, internship programs, and more. One day we will be ranking HBCU b-schools, graduate programs, and more. The vision is grand as I am sure it is for our colleagues, but patience is key because whether it happens in the next year or the next ten, we are here to stay, here to grow, and here to be a force. Thank you for eight years of support.

Rest In Peace Kobe & Gianna Bryant. May this year be a tribute to their work ethic from all of us at HBCU Money.

 

The $6 Billion Delusion Of Grandeur: HBCU Alumni Refuse To Accept The Harsh Financial Reality Of HBCU Athletics


“Every day is a new opportunity. You can build on yesterday’s success or put its failures behind and start over again. That’s the way life is, with a new game every day, and that’s the way baseball is.” – Bob Feller

It sometimes feels like there is no more irrational sector of HBCUs than athletics when it comes to HBCU alumni bases and administrations. We want to buy the Empire State Building, but barely have money for a night at Motel 6. If you have watched ESPN’s 30 for 30: The Pony Express and The U, then you probably do not need to go further in this article. For those who have not watched either, please do so immediately and continue to read. If cheap shots on the field bother you, then you are not at all ready for the brutality of what happens outside the lines and behind closed doors. College athletics is a contact sport, a dirty business, not for the faint of heart, and the cost associated with it remind us just how huge the institutional wealth gap is between HBCUs and our counterparts.

In 2014, HBCU Money produced an article that showed the SWAC/MEAC conferences were losing a combined $130 million in their member athletic programs. Two years later, that number had skyrocketed to $147 million. The members of the two conferences had combined expenses of approximately $194.1 million while revenues without subsidies were a meager $47 million. Of course most alumni have no idea that the subsidies that we speak of are primarily student fees. These subsidies accounted for a staggering $142.5 million or 75 percent of the athletic revenues that the SWAC/MEAC generated if you can call it such a thing. Subsidies or allocated as defined by the NCAA and others consider student fees, direct and indirect institutional support and state money “allocated,” or everything not generated by the department’s athletics functions. It is not clear however by the NCAA definition if booster giving is considered a subsidy or athletic functions. However at 75 percent of revenues what is clear is that it is not ticket sales, sponsorships, merchandise sales, media deals, etc., but primarily student fees driving HBCU athletic revenue.

For the majority of our students, that means additional cost onto their cost of attendance which is largely financed through – you guessed it – student loans. Essentially what rabid HBCU alumni and administrations have done is asked students to take out a loan for sports. A predatory payday loan at that. The irony is that even with the subsidies the two conferences still were losing money, approximately $5 million, meaning HBCU boosters were not even giving enough to breakeven. Many HBCU alumni hold dear to the belief that if you build it they will come (eventually), they being the abundance of riches that African American athletes pour into our white counterparts and if they return to HBCUs the power will tilt and so will the finances of sports back into our favor making our programs profitable and financially abundant. Never mind the harsh reality those mega television contracts we read about to the Power 5 have little to do with the athletes on the field and more about the fans in the seats and audience nationwide. Outside of the Bayou Classic, there is not one HBCU football or basketball game that could bring over 70,000 (Superdome’s capacity) to it and millions of viewers on television. The latter mainly due to it being a Thanksgiving weekend game and the game itself almost became something of a staple to watch in many African American households. Fan bases care about having the best players because they care about beating their rivals. Coaches care about having the best players because they want to keep their job. The fact that they are African Americans is a byproduct of a game played almost 50 years ago when USC beat Alabama with a young African American kid named Sam “Bam” Cunningham who “Bear” Bryant’s all-white team had no answer for so in true fashion they went out and got a few of their own. And the rest as they say is history, but the past echoing into the present is very real and the present’s echo into the future is also very real.

The question is as educated and critically thinking capable alumni, why are we not able to examine this subject in a rational and objective manner? Why are we not able to devise an actual plan that does not involve breaking the backs of our students? African Americans are already the poorest group by median income ($40,258 vs. $61,372 for all races) and median wealth ($11,030 vs. $134,230 for European Americans) in America and we want to make it that much harder for our graduates to become financially stable and wealthy in exchange for sports? Primarily, this accusation is lobbed at football and men’s basketball and the black financial holes that they are to the majority of the nation’s colleges. By far, they are the two costliest sports on any college campus, black or white.

Schools like the SWAC’s Prairie View A&M built a $60 million stadium and new athletic complex (uncertainty as to whether the school’s current renovation of their basketball arena is included or not) and Jackson State University at one point even had the gall to suggest a $200 million domed stadium complex. Yet, without subsidies Prairie View’s program lost $13.1 million in 2016-2017 and Jackson State lost $5.4 million. Meanwhile, Spelman College scrapped its athletic program six years ago. The former president, Dr. Beverly Tatum, “When considering our options, I learned that we only had 80 student-athletes and the cost of our program was approaching $1 million per year.” This against a reality of serving a college of African American women and as an ESPN article noted, “49 percent of African-American women over the age of 20 had heart diseases, and were twice as likely to develop Type 2 diabetes as non-Hispanic white women. The health issues that black women faced, including those at Spelman, were very much linked to diet and a lack of physical activity.” Spelman and its leadership wanted alumni to be healthy now and for the future. Health builds wealth is not just a saying but a real reality. Less days missed at work means more income earned, more money saved and invested, more wealth created, and more opportunity to give back to your alma mater. This is not even getting into the costs that many African Americans suffer from later in life because of poor lifestyle and diet which becomes so costly that there is little left at the end of life to even leave behind to their HBCU. Is Spelman sacrificing their athletic program today so that they can have wealthier alumni tomorrow who would be able to bring back the program and truly have it be sustainable? How much of a donation would it take to endow the $1 million annually to bring back their athletic program? Approximately $15-25 million.

Are we suggesting that all HBCUs follow Spleman’s lead? No, certainly not. There can be a happy medium, but first HBCU alumni need to truly understand the cost associated with major college sports, primarily football and men’s basketball. The harsh reality is that these are the only two sports at the college level that currently generate any significant revenue for colleges and unfortunately the cost to recruit in these two sports starts far before an athlete even gets to college. Recruiting for prized college basketball players for many college coaches starts in AAU middle school. Coaches from the basketball Power 5 conferences are constantly traveling year round and scouting talent that will not be college ready for four to five years in many instances. To say it is costly to follow an 8th grader around is an understatement, but if you do not do it, then you have almost no chance at seriously recruiting them (or their family) later on. HBCU alumni are not sponsoring or even mildly impacting the AAU financial machine, which can cost a family upwards of $5,000 for summer play and often times those costs are absorbed by a benefactor who maybe more akin to the Godfather and wants you to remember the favor he did for you later. Google AAU bribes and Google almost has a heart attack returning the amount of searches on the subject. When it comes to football, the situation has become just as complicated with the advent of the 7 on 7 leagues that have popped up all over the country. The cost spent on developing and “steering” young black boys as athletes begins early and costs tens of of millions annually – and we have not even gotten to the programs themselves yet. There is an enormous amount of dark money that is spent by athletic companies like Nike, Reebok, Adidas, etc. to ensure that the pup stars in both sports go to schools where they can maximize the exposure of the next superstar wearing their apparel. Of course, high school and AAU coaches receive perks for being the “voice of reason” to help influence many young men and advise their families on where would be best for them. Again, HBCU alumni and boosters barely have money to give to their own athletic programs, let alone “lobbying” to high school coaches with no guarantee of payoffs, but mandatory if you want to even be in the conversation. Then there are the facilities.

While Prairie View A&M spent $60 million on a stadium and athletic complex a few years ago, the University of Oregon was spending $68 million on a football performance center. Yes, Oregon built a building dedicated entirely to their football program and the state of Oregon changed the laws to accommodate the building that ran afoul of building codes because of the influence of Phil Knight, the founder and largest shareholder of Nike and the University of Oregon’s biggest booster. According to Oregon Live it includes, “offices, team video theaters, offensive and defensive strategy rooms, a coaching conference suite, a video editing center, a dining hall and a weight room.” Again, just for football. The Darth Vader to Prairie View A&M University’s Luke Skywalker for good measure, Texas A&M University, spent $450 million on a stadium renovation or eight times what the entirety of Prairie View’s athletic complex cost for a renovation to its stadium and now seats over 102,000 people. It has taken some HBCUs over 30 years to raise the money for even moderate renovations to their HBCU athletic facilities. Many are still waiting and some tired of waiting, increased student fees to redirect toward athletics. Colleges have to have the latest and greatest to attract the best athletes who are being treated as deities before even stepping foot on a college campus. College athletics has become an arms race of new facilities, high-paid coaches, under the table bags of money to recruits and so much more that spiral the cost beyond many of our wildest dreams. The rabbit hole is deep.

A few names and numbers:

Al Dunlap – $15 million. Paul Bryant, Jr. – $20 million. Phil Knight – $300 million. Christy Gaylord Everest – $18 million. Drayton McLane – $200 million. Herb Kohl – $25 million. Jack Vanier – $20 million. These are just six boosters that Mother Jones reported were major college boosters in an article in 2014. The six donations account for almost $600 million, an amount that is four times the size of the losses the SWAC/MEAC losses account for just a few years prior. Need even more perspective on how big these donations are? Aside from Prairie View A&M’s $17.9 million in expenses, those donations could cover the expenses of any SWAC or MEAC school in their singular. Phil Knight’s giving to the University of Oregon (since 2014 he has given another $200 million to Oregon) or Drayton McLane’s giving to Baylor University could cover the cost of every school in the SWAC and MEAC ($194.1 million) with money left over in the bank – by themselves. In comparison, HBCU Gameday recently reported that Winston-Salem State University was in the midst of a $250,000 athletic capital campaign with major donors coming from ESPN and WSSU alumnus, Stephen A. Smith, with a gift of $50,000 and Chris Paul, an NBA player whose 2018 salary was $25 million, giving a gift of $25,000. Large donations in HBCU athletic circles indeed, but making HBCUs competitive in recruitment among blue chips – not so much.

Unfortunately, there is no real repository of data on booster giving among colleges. Most of the information on the aforementioned boosters is from press clippings where donations to Power 5 conferences make headlines. In fact, a lot of giving becomes very opaque if we factor in boosters who provide jobs to athletes’ family members (remember Reggie Bush?) and the like. For the HBCU 5 conferences, there are not even press clippings, although if HBCU athletic and development departments wanted to disclose how much in donations were directed toward athletic programs from alumni it would be acutely helpful or create a database that sites like HBCU Money could use to give a fair analysis of the giving that is happening in HBCU athletic programs it would be greatly appreciated. However, again when 75 percent of the revenues come from student fees, it is not hard to know those numbers would be embarrassing and minuscule at best. And that brings us back to our problem of HBCU alumni who seem to be delusional about the true cost for building the type of athletic programs that can be self-sustaining and not breaking the back of students who in the future will not be able to give like they could and creating a vicious cycle of under giving to the institutions as a whole – all for the sake of sports.

The HBCU 5 athletic programs based on the SWAC and MEAC’s numbers, being Division 1 programs makes them inherently more expensive, brings all five conferences (SWAC, MEAC, CIAA, SIAC, & GCAC) total expenses to around an estimated $300 million annually. There are only two HBCUs with endowments above $300 million and we are possibly still a decade away from Howard University becoming the first HBCU to a $1 billion endowment. There are over 100 HWCUs with endowments over $1 billion. Around 90 percent of HBCUs do not even have endowments of $50 million. A startling statistic when you have schools trying to run athletic programs that cost $10 million plus annually. If HBCU alumni who truly cared about sports wanted to endow HBCU athletic programs with enough to generate the $300 million annually they would need to raise between $4 to $6 billion and hope they can find returns of almost 10 percent annually in an economic environment that is giving out low to mid single digit returns far more commonly. At 5 percent annual return, it would take $6 billion for HBCUs to get HBCU athletic programs off the backs and out of the pockets of its students and help reduce student debt loads. Almost 9 out of 10 HBCU graduates will finish with debt, 32 percent higher than the national average and a median debt load that is 40 percent higher than their counterparts at Top 50 endowed HWCUs. Is it worth it is a question any HBCU alumni and athletic boosters must ask themselves who cares about our institutions and the students who matriculate through them.

Wayne Gretzky is famously quoted as saying he was great because he skated where the puck was going not where it has been. HBCU alumni are bent on doing the exact opposite when it comes to athletics. Even if HBCU alumni could raise the $6 billion, it would be a fools’ decision to spend it on sports, mainly again football and men’s basketball. So why is an HBCU like Florida Memorial University selling $100 t-shirts to bring back its football program? Is it pressure from alumni? Is it an administration that wants it to be part of their legacy? The long-term implications of fielding a football program when Florida Memorial was moving towards a future of profitable athletic sports is baffling to say the least.

Little League sports statistics show that soccer is the future in this country, baseball is seeing a resurgence, and women’s sports is just scratching the surface of its potential globally. David Beckham, an international soccer megastar in his day and now the owner of the Miami MLS franchise, spent time at Florida Memorial just five years ago. Beckham’s is a relationship that should be leaned into and nurtured to put it mildly. Meanwhile, the pipeline for football is dwindling rapidly due to society’s fears over health concerns and yet, less than twenty HBCUs have soccer teams. HBCUs have all but abandoned baseball despite its resurgence in America and globally. Again, where the puck is and where is it going. This is to say nothing of the infancy that Esports is in, an industry that is estimated to breach a value of $1 billion in the next year according to the World Economic Forum coupled with prize money as high as $1 million for gamers in some tournaments and what feels like an exponential growth in sponsorships and endorsements. Esports is picking up so much steam it is being introduced in high school athletic programs and even some colleges are starting to offer Esports scholarships. There is not one of us who is over the age of 35 and under the age of 50 that does not remember a Madden tournament in the dorms of our HBCUs. We were early as we usually are, but completely missing the opportunity to leverage and be ahead of the curve.

HBCU alumni and athletic boosters need to have tougher conversations with themselves and with administrations. Read your HBCU’s financial reports for starters. A lot of this is poor financial literacy in that we do not know the cost of running our institutions, growing endowments, and sustaining an athletic program. We simply can not afford to buy high and sell low with HBCU athletics anymore. There is a happy medium and we need to have a honest conversation about it. Alumni and boosters need to understand the true cost of running our programs (something administrations need to be more transparent about) and not continue with the pie in the sky hope that African American high school athletes are just going to miraculously pick us. Zion Williamson, who had two parents attend Livingstone College still chose Duke University. There is a moat around football and men’s basketball and we need to accept that, but those two sports will not be the fountain of prosperity forever. Malcolm X said the future belongs to those who prepare for it today and it is time for us to start preparing like we need to cram for a final exam in the morning and our graduation depends on it.

HBCU Money™ Turns 7 Years Old


By William A. Foster, IV

“Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world.”

Seven years strong with so much more to do. The past two years have been a test of mettle for HBCU Money and HBCU journalism as a whole. As journalism and media as a whole are becoming an even more complicated business with much of larger media being purchased by a small class of people who can afford to pour resources into it without needing it to make any money, yet leveraging the benefits of shaping public opinion it leaves an industry in flux. This dynamic leaves many smaller imprints with less external resources in a precarious position. Making enough money to keep the doors open, grow, and still able to put some Ramen noodles on the table for our families.

HBCU media ownership has, is, and will continue to be a labor of love certainly, but if we want it to scale to the level of influence we need in our community we need to have real conversations about just how and what needs to happen for that scale to take place. The importance of HBCU owned media can not afford to have all chiefs and no warriors.

At HBCU Money, I am excited for some of the things ahead that have been in the works for quite a few years on the drawing board finally getting off the board. Unfortunately, some of it maybe the leap of faith more than the resources available. Seven years into this though, faith is certainly something never to take for granted. I thank everyone who has restored it when it has been shaken and filled up the bucket when it was running low. There are too many to name, but you are appreciated. It is my hope that HBCU Money can continue to be worthy of your support and faith.

 

Brother To Brother: Sorry Jarrett, Athletics Can Not Save Us, But Research & Entrepreneurship Can


“And this is going to piss Will off when I say this, but go get a football coach.” – Jarrett Carter

I open this “letter” to my dear brother saying that we have known each other for many years and this debate maybe as old as our friendship. Even I will admit that at one point I too believed that if HBCUs could return to obtainment of our community’s physical talent on the football field and basketball courts that our schools would reap the financial rewards they so desperately need. Unfortunately, Michael Vick, LeBron James nor his son, or the likes of Zion Williamson is walking through our doors anytime soon. Instead, we are going to have to rely on what truly drives the economics and finances of higher education institutions and that is research, entrepreneurship, and good old fashioned Afro-Brain Power.

Let me first address why we have absolutely no chance in sports savings us. I do not mean we have a little chance, I mean we have no chance. None. Zero. Negative zero even. Unfortunately, HBCUs even if LeBron James had gone to one can not fight the shiny uniforms that billionaire boosters like Nike’s Phil Knight rolls out to the University of Oregon every other week or the tens of millions that Kevin Plank the founder of Under Armour has poured into the University of Maryland’s athletic facilities. The former has so much influence in the state of Oregon that when he wanted to build a headquarters dedicated just to football that apparently ran afoul with the state building process – the state changed it. Yes, the state changed it. Both of these programs mentioned until these billionaire boosters got involved were marginal programs at best and are now most would agree significantly better, but by no means powerhouses. Essentially, Knight and Plank have poured over $500 million into these programs combined to take them from the basement of Division 1 college athletics to middle of the pack and sometime contenders. Between these two men, they are worth a combined almost $40 billion. It is safe to say the interest on their wealth alone allows for eight and nine figure donations to their alma maters in perpetuity if they so choose. Ironically or not, both of these men were college athletes who became entrepreneurs and not professional athletes and whose products were essentially developed in their time on campus, but more on this later.

Secondly, the ROI on athletes going pro or schools turning a profit on athletics is just not even worth a paragraph so I will keep this short. The NFL, NBA, and NCAA continues to squeeze HBCUs out of professional sports. HBCUers in the NBA is more a historic statement than current or future one. This year’s list of HBCU alumni in the NFL and their earnings: 22 players representing 16 HBCUs and combining for almost $40 million in earnings, which is the lowest earnings figure since HBCU Money started tracking the data. For perspective, that $40 million is 0.1 percent of Knight and Plank’s combined net worth. To further drive the point home, if Knight and Plank put all of their wealth into a savings account paying 1 percent, it would earn $400 million – ten times what all HBCU players will earn in 2018. Further to the point, because these careers are so short, major donations from these players who have tasted professional glory have been few and far between. I am still waiting on Jerry Rice to make a public donation of the seven figure variety – not a pledge, Jerry – to Mississippi Valley State University. Yet, schools like Prairie View A&M University spend $60 million on a new stadium that struggles to sellout. Lest we forget the almost disaster dome Jackson State University wanted to build at $200 million. If your school does not have access to a major TV network contract, the chances of you making money is almost slim to none and networks offer those contracts because they want to sell advertisements – networks I might add that are not African American owned and represent a media that shows a consistent disdain for our institutions. How do you sell that level of advertisements? Large fan bases, pure and simple math. The University of Michigan or Alabama on any given Saturday can put 100,000 fans in the seats and probably another million plus eyeballs glued to the television screen. HBCUs (individually) do not have that kind of scale nor the means to create it. So much for a short paragraph, but the problem is deep and the solution even deeper. The solution to building sustainable institutions lies in a holistic and committed approach to research and entrepreneurship on HBCU campuses.

HBCUs (and our alumni) for whatever reason have never really committed to research. Even during the days of George Washington Carver at Tuskegee Institute there were rumors that his research was looked at more in passing than integral to the future of the institution. I dare imagine what Tuskegee would be like had Carver or the institution had the patent on peanut butter. The global peanut butter industry is worth an estimated $3 billion as of 2017 and demand is growing at 6 percent annually according to CAGR. An article in the New Yorker reported, “In 2012, American universities earned $2.6 billion from patent royalties, according to the Association of University Technology Managers. The tech-transfer model is entrenched in medical schools and in biotech development.” As noted in our piece about HBCUs and patents, the University of Wisconsin and Carnegie-Mellon University garnered patent settlements in their favor to the tune of $1.2 billion, an amount that is virtually half of all HBCU endowments combined and almost three times what HBCU spend on research.

HBCUs combined have research expenditures of approximately $520.1 million as of 2017 according to the National Science Foundation data, an amount that is 0.7 percent of the $75.3 billion colleges and universities totaled in R&D expenditures. A number that has been declining every year for the past four years and off dramatically from 2014 when expenditures were a combined $547.1 million at HBCUs, a decline of almost 5 percent over the period while the top ten R&D colleges/universities have seen their expenditures rise by almost 20 percent in the same period. There are now 46 individual colleges and universities whose research and expenditures exceed $520 million per year, 12 of them exceeding $1 billion annually, and then there is John Hopkins University that lords over everyone with its $2.5 billion annually in research expenditures. But what does all this investment in research mean to sustainability? For one, it means these schools are institutions that are integral to the intellectual advancement of the nation in every aspect of industry, government, and military. A charge that HBCUs could take on in a very similar fashion for African America and the African Diaspora at large if it wanted to really be aggressive. However, it also takes on the commercialization of research, which ultimately leads to answering the question you my dear brother asked – Can HBCUs Create Billionaires?

In an oldie but goodie article that I published at HBCU Money many years ago called “The University of Power & Wealth”, I asked the question, “What do Google, Time Warner, FedEx, Microsoft, Facebook, and Dell have in common? They were all founded on college campuses. Google founded at Stanford, Time Warner & FedEx at Yale, Microsoft and Facebook at Harvard, and Dell at the University of Texas.” The value of all those firms as of this publication are a combined almost $2.2 trillion. Yes, that is trillion with a T. In addition, the founders of all these companies, except for the now defunct Time Warner which was sold for $85 billion to AT&T, have a combined net worth over $320 billion as of this publication. Some would argue that even the world’s move valuable company, Apple, is the result of Steve Jobs and Steve Wozniak’s proximity to Silicon Valley, basically a development creation that sprung out of Stanford’s research. Stanford and MIT maybe the nation’s most entrepreneurial colleges and it is no secret that their endowments reflect their innovation.

MIT is a monster or model all in and of itself. The school located in the heart of Boston, MA. has a student population of a little over 11,000 students. It is ranked 14th in the country with $950 million in R&D expenditures and that research combined with entrepreneurial DNA and cultivation shows up in a major way. “A new report estimates that, as of 2014, MIT alumni have launched 30,200 active companies, employing roughly 4.6 million people, and generating roughly $1.9 trillion in annual revenues.” If HBCU entrepreneurs employed 4.6 million African Americans it would be equivalent to employing almost 1 in 4 African Americans that are employed and the $1.9 trillion in revenue would be 50 percent greater than all of African America’s current buying power. MIT is so committed to its entrepreneurial culture in fact that it has even created an accelerator called The Engine to fund these ventures. “Just months after its launch, MIT’s new startup accelerator The Engine yesterday closed its first investment fund for over $150 million, which will support startups developing breakthrough scientific and technological innovations with potential for societal impact.” Can anyone imagine what would come of the ingenuity that our students possess if we had access to startup capital at even a fraction of that amount? Unfortunately, some in leadership want to spend more time bickering about why Michael Bloomberg, John Hopkins alumni and founder of Bloomberg L.P. and net worth of $45 billion, should have given the $1.8 billion he recently donated and some of the $3 billion overall he has donated to John Hopkins to schools who need it more than actually making the investments they can make into their own students, alumni, faculty, and staff so that they can create the next Bloomberg.

Let me also be clear in that last point that this onus is not all, not even remotely the responsibility of administrations who may come and go ultimately, but on alumni. Our alumni and their deference to administrations is part of the problem. Most HBCUs and the communities and towns they are in are underdeveloped and therefore there is millions of dollars that flow from our HBCUs every year from students and the like that could be circulated back. If alumni would invest in the dirt and build infrastructure so that small businesses, entrepreneurship, and capital was available intimately to their own HBCU, it would go a long way in creating communities, businesses, jobs, internships, opportunity, and more.

In closing my dear brother, I say this to you. It is indeed Afro-Brain and intellect that is our key not only to survival but success. Yes, sports pull at our heart strings, but it is not putting anything into our purse strings. Bowie State University obtaining their first patent is amazing, but it needs to go from breaking news to common news. HBCUs can be at the forefront of the new space race, the cure for Alzheimer’s, solving the water crisis in Flint, or the latest best selling apps for smartphones and the like if we truly believe that we can and invest in it like we mean it.

In HBCUs We Trust,

William A. Foster, IV