Category Archives: Editorial

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.

 

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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

HBCU Money™ Turns 6 Years Old


By William A. Foster, IV

“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” – Henry Ford

The path to success has never been a straight line. That is true in anything we hope to accomplish in life. For HBCU Money, growing out of our infancy into a mature company has been a painstaking process to say the least. As we turn 6 years old, there are a lot of questions that are at the forefront of this journey that we are in the process of answering.

It is my belief that for the first time since we started, we maybe gifted the resources needed to truly grow and mature as a media asset to the HBCU community and to the financial journalism community. I purposely quieted our ranks last year as we published very little. This year may prove to be more of the same as ensure a clarity of the path in which we will move forward, but we will be heard from. It iss a chance to settle the spirit of our offices and take a step back and truly understand what needs to be done going forward to get us to where we truly want to be with this medium.

I am steadfast in the future of HBCU Money being an important voice in how our institutions and their stories are told. Thank you to all who continue to support that mission.

Nice Colleges Finish Last – Time For HBCUs To “Hit ‘Em Up” PWIs


“He will win who knows when to fight and when not to fight.” – Sun Tzu

Unapologetically for African America and its interests. This is the message that HBCUs needs to send its own community.  After all, this is the message the European American citizenry of the United States has always made clear to their population since the Europeans arrived on occupied land and it continues to be the message it has laid in its policy when it interacted with the rest of the world. Their social, economic, and political interest were first, second, and third priority and they would build and defend those institutions at all cost. The only time others are welcomed to be a part of their institutions is if they are serving to enrich their interests.

It is no secret that HBCUs since desegregation have seen a rapid decline in the opinion of African Americans who sought the perceived colder ice of America’s historically white colleges and universities. Currently, between 10-12 percent of African Americans college eligible choose HBCUs. The reasoning that if you could get inside, then you too would enjoy the spoils of association with whiteness and if we all just tried hard we could get our fair share of their pie. We bought into the idea that access for 1 out of 100 at the expense of the 99 is progress.

Unfortunately, at every turn HWCUs seemingly have outmaneuvered us with resources while siphoning many of our best and brightest minds for their academics and best bodies for their sports, all while maintaining a firm grip on the power their institutions wield.  They have sold African America a lie of inclusion, when in reality nobody can include you without relinquishing their own interest – something that over and over is clear they will not do without a fight. The better question is why have we so long been naive to this reality. Our invite into their institutions has been nothing more than a misdirection of us being occupied by access to them, while systemically ignoring and destroying our own institutions without so much a shot being fired. They have in fact used our desire to have access to their love and affection as Ossie Davis said once to manipulate us into continuing to keep their institutions as that which we should all strive to achieve and pursue.

In fact, specifically to the fact of higher education and HWCU consumption of African America’s intellectual capital for its own gain, it has been utterly fascinating as HWCU/PWIs have tried to create almost a bubble of an HBCU on their campus to appease their chosen “few”. Everything from a welcome mat of the Divine 9, Black Student Organizations, to in the case of the University of Virginia’s Black Alumni Weekend. Irony of sorts given the school’s recent hosting as well of white supremacist groups on their campus. Yet, despite all these wonderful packages and smoke and mirrors at the end of the day there is no denying that African American students face hostilities by their mere presence that they would not face at institutions built for their interests and by their forebears.

Here is a snapshot of recent racially charged events on the campuses of PWI/HWCUs:

  • The “N” word is written on African American student dorm rooms and possessions at University of Michigan. (2017)
  • University of Virginia is ground zero for protests over confederate statues in the college’s town. A bystander ends up dead in the chaos. (2017)
  • White supremacist posters are put up on the office doors of African American faculty at Indiana University. (2017)
  • Sorority at Samford University makes shirts depicting slaves picking cotton for their formal dance. (2016)
  • An African American student is assaulted at East Carolina University with police concluding it was racially motivated. (2016)
  • UNC-Chappell Hill academic fraud that used African American athletes for financial gain, but provided no real education to them during their matriculation. (2013)

The first five of these events have happen within the past eighteen months at the time of this publication and by no means the only as the history of racial incidents at HWCU/PWIs is littered with enough it would require an encyclopedia to catalog them all. Now, in fact historical incidents of racial strife at white colleges is used as good PR for them as a sign of their progress in racial justice that these incidents are of the past and that those African Americans were “trailblazers” of sort making the world a better place by forcing institutions to deal with their outwardly blatant prejudice and disregard for African America empowerment. However,  where do you not see racially motivated incidents in the history books or present media? At HBCUs, not even toward white students who are at HBCUs do we hear such claims of verbal or physical abuse being experienced.

HBCUs, HBCU alumni, and HBCU support institutions need to stop being quiet about this. It is time to take a page out of one of the greatest diss record’s of all-time by noted hip-hop legend and Pan-Africanist, Tupac Shakur. The record, Hit ‘Em Up, was directed at his bitter rival Christopher “Biggie” Wallace, but certainly not limited too him as those even around Wallace would feel the ire of Tupac’s ire in the song. During the song, Tupac put the niceties of subliminal lyrics and instead went straight after his enemy with a visceral barrage of lyrics in layman’s vocabulary that left nothing to the imagination of his grievances with his rival.

The HBCU community must stop playing nice about the recruitment of African American students and let them know who truly represents their interest versus those who just want them for appropriation. Perhaps HBCUs do not want to muddy themselves directly publicly with such a campaign, but it is clear that HBCU support organizations and something along the line of creating HBCU PACs could be formed to run campaigns that spell it out bluntly for this new generation of potential HBCU students. Explaining to them that even if you gain access to the academics, simply put, we are still excluded from the power because those institutions were not built to serve our interests. That we have instead found ourselves on academic plantations where the board of trustees, major donors, and the power structure that is remains rooted in the interest of European Americans whom it was built to serve. For this, we can not fault them because they are looking out for their interests. However, where we can be faulted is not looking out for our own interest and ensuring that African America understands African American institutions like HBCUs, communities, businesses, etc are here to do just that. If it means continuing to point out just how blatantly PWI/HWCUs have and continue to use us, then so be it.

An HBCU is a place where an average student can still be great because they are not walking into a classroom having to uphold the entire race. They are allowed to have the emotional and mental space to be and grow into themselves. Things like this need to be continuously reminded to African American parents and potential students and if it must be done juxtaposition against the pains of African American students at PWIs, again then so be it. Oh, and we do not need a Black Alumni Weekend, we just call it Homecoming. Hit ‘Em Up and put a flamethrower to their ice.

City Bus Stops: An Underutilized Force For Education


Users do not care about what is inside the box, as long as the box does what they need done. – Jef Raskin

By William A. Foster, IV

It was one evening some years ago that my father and I had a debate in my  parents living room about an article that I read in the New York Times concerning prep schools versus public schools and how much they spend per student. The New York Times stated that Philips Exeter Academy in 2008 spent $63,500 per student annually, while a report from the Organization for Economic Cooperation and Development shows that the U.S. as a whole spends about $12,000 per student annually. My father could not understand what PEA could possibly be spending over five times the amount on. I said to him it was the difference between showing a kid a map of India and taking them there. That being said, as someone who comes from a family of educators and being a community college professor for a period of time and seeing just what happens when an adult has had a weak K-12 experience, I often ponder ways in which communities can go about closing education gaps among groups and strengthening the education infrastructure.

Perhaps the worst kept secret is that groups who come from disadvantaged backgrounds have a chronic gap when it comes to education. By age three, children from lower income homes have heard 30 million fewer words. The national high school graduation rate for African Americans is 73 percent, which is almost 10 percentage points lower than the national average and 14 percentage points lower than European Americans. There have been calls for a universal Pre-K, which sounds good in theory but probably will ultimately do just as much harm as the current system. Many have argued that the U.S. does not spend enough on education, this despite the OECD saying that the U.S. actually spends more than any other country on education. The report according to CBS News that, “In 2010, the United States spent 7.3 percent of its gross domestic product on education, compared with the 6.3 percent average of other OECD countries.” This appears to be not a case of not spending too much, but spending it poorly. As an economist and investor myself, one of the most important things for my firm is capital allocation. It is not just a matter of how much we are spending, but where and how we are allocating that spending. Simply spending more is not always an answer to fixing problems as many on the political left suggest, but neither is allowing students to go to better schools through vouchers a sensible alternative as those on the political right suggest which would have devastating effects on the economics of poor and middle class communities. In essence, what is needed is a better creation of supplemental education for those communities. Supplemental education is the ability to access learning away from the four walls of a school.

For many upper income families, museums, summer camps, and private tutors provide the moonshot to the education they receive during their K-12 matriculation. These experiences and building blocks add to a substantive educational gap between the haves and have nots and while there are always many fascinating high brow proposals of how to fix education for underserved communities, we often ignore the simplest. Two things of note should be focused on to that respect. First, provide supplemental education where the people you hope to reach spend their time. Secondly, keep it simple. Academics, again I come from a family of them, while I admire their ability to convey information, they are at times too smart for their own good. In other words, they can make one plus one into the next coming of Einstein’s theory of relativity if you give them enough time. For underserved communities though it is often at the foundational level where they are most deficient. An issue that then cascades and compounds year after year as they progressed through secondary and then into adulthood. It was the simple foundation that they missed and that their kids are missing that could have moved their trajectory. So how do cities both meet the people where they are and more importantly where their time is “hostage” and and also keep it simple? Bus stops.

1 Million Milestone

That is right, bus stops. New York City has 16,350 of them, Los Angeles has 15,967 bus stops, Chicago has 10,813 bus stops, and Houston has approximately 9,000 according to a Twitter inquiry. These are the four largest urban cities in the United States of America with a combined population of 17.5 million, a number equivalent to 5.4 percent of the entire U.S. population. The four cities ability to serve low income and middle class families is obviously magnified just by the probability of the sheer size of the populations they have that will fall within those confines. The poverty levels for the four aforementioned cities is also surprisingly inversely correlated to their public transpiration size with New York City’s 20.3 percent, L.A.’s 22 percent, Chicago’s 22.6 percent, and Houston’s 22.9 percent. According to Pew Research Center, “Americans who are lower-income, black or Hispanic, immigrants or under 50 are especially likely to use public transportation on a regular basis.” There is not enough research to show a correlation to public transportation’s reduction in poverty, but one can access that the easement of which labor can move farther distances allows for more economic opportunities to be gained. Therefore, if a low-income community has access to affordable public transportation and their own community lacks economic opportunity, the ease by which they can move into areas of stronger economic prowess may allow them work opportunities they may not otherwise have available. However, while there maybe no correlation, there is opportunity to educate and we know that correlates to reducing poverty.

Imagine for a moment that each bus stop, both children and adults, are introduced to a digital screen (think those annoying “commercials” at gas station pumps) that circulates a plethora of vocabulary words, basic mathematics problems,  and science and history clips. Just the basics, but again fundamental. If a city really wants to get out of the box, even introducing lessons in financial, health, and government literacy. If done in concert with the school districts in the city, teachers at the elementary through college levels could be featured in these videos and those teachers targeted in bus stops within their teaching area. This may also go a long way into reestablishing what many now complain about as the broken bond between parents, their children, and the teachers who educate them. The videos produce a familiarity for the teacher in the same way that people develop affinities for celebrities they have never met. Of course, in this age where municipals are tight on funds, just how does all of this get paid for? This is a financial journalism publication after all. The PPP (Private-Public Partnership) model would be most advantageous. Companies in the city, New York City, Houston, and Chicago have 143 Fortune 1000 companies combined, would foot the majority of the bill for the producing of the digital content and refitting of the bus stops. Just what those companies would receive in return beyond goodwill and basic advertising would be left up to the leadership of the city to negotiate.

I grew up in a household and family where education and learning was not only a family value and expectation, it was something I was immersed in as I reflect in what seemed like at all times. There were always books around, much of my life existed on a college campus as my mother has been a professor for almost four decades, trips to museums, engagement with the arts, and as a result me and my sister’s probability of succeeding was given a great advantage over many of our peers. Education is a wholistic lifestyle that one is immersed throughout their lives. The sooner that immersion, the more often that immersion, then probability of success is sure to follow. My sister and I were at an advantage, we were a privileged pair whose family can trace our educational heritage back four generations to my great-grandfather and great-grandmother who were college graduates. That is not the reality for most low income and middle class families. They are families trying to take that next step, even if they do not know which step to take often. In order to increase their probability towards that success, cities have to acknowledge that they are often in poor schools to begin with and that they need more, much more. The best return on investment is often achieved in using the infrastructure that already exist and that meets citizens where they are.

As Jef Raskin alludes to in his quote, communities will not care where quality education happens be it in a school or at a bus stop, so long as it happens.  The ability to convert bus stops into head start and continuing education facilities for a city is something that truly does what needs to be done.