Category Archives: Philanthropy

Abandoned By (Black) America: HBCU Endowments Less Than One Percent of American College Fortunes


A great nation cannot abandon its responsibilities. Responsibilities abandoned today return as more acute crises tomorrow. – Gerald Ford

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There are two houses and two families, we will call them the Smiths and Jacksons for the sake of this story, who are living next door to each other in a neighborhood. The Smith family in one household are preparing for a feast as it seems they do every night. Meanwhile, the Jackson family prepares their own feast, but just as they do every night at dinner they pack all their food up and walk next door to their neighbors home and knock on the door. The Smiths open the door as always with a smile and greet their neighbors and take the food they fixed and promptly slam the door in the Jacksons face. They add the food to their already illustrious feast without as much a second thought that they have more food than they need and that the Jacksons once again gave them all of their dinner. The Jackson family stands by an open window where they can smell the feast that they and the Smiths cooked as it sits on the Smiths’ table. Yet, they are offered nothing but the aroma. Eventually, the Jacksons return to their home starving and as every night goes, one of the children ask the parents, “Why do we give them our food when we have a table here to eat our food on?” At which time the parents always reply, “Because our food taste better on their table,” to their children who eventually will feed their malnourished and lean bodies with the bread and water they always receive after this affair. The children confused by this statement from their parents further inquire how do they know it taste better on the Smiths table. Their parents tell them of a time when they were allowed to sit at the Smiths’ back door and have a taste of the food and it definitely tasted better. The Jackson parents insisted it had to be because of the Smiths’ beautiful table, even though the food came from their kitchen. Then the children as they always do plead with their parents to allow them to keep the dinner tomorrow so that they can grow to be big and strong and one day they will be able to build all the fine things their parents see in the Smiths’ window. However, the parents tell them that when the Smiths cut wood for their home they cut it better than they did, that when they build furniture they build it finer because they have better tools, and when they serve drinks their drinks taste better because of course, their ice is colder. So the Jacksons continue to resound to every night giving their dinner away in hopes of one day being allowed to eat their own food at another’s table. And so has been the relationship to African America and its own institutions.

Over the past 60 years, African America has, save for the black church, been on an expedited exodus from supporting, building, and controlling its own institutions for the colder ice of their neighbors in the hopes that they would one day be allowed to sit at their neighbors’ table. This despite during the post-antebellum period up until World War II when African America started, controlled, owned, and supported institutions of commerce, education, politics, health, and more all within their own municipalities. Five hundred hospitals at one point, one hundred boarding schools, thousands of businesses, and yes over one hundred what we know today as Historically Black Colleges and Universities. Now, that first seventy some years of blacksmithmanship that built these institutions after the Civil War has been replaced by a culture of abandonment over the past sixty years.

In a recent article, Forbes highlights the institutional wealth disparity that exist within United States higher education institutions. A national system that comprises approximately 3 000 colleges and universities across the country have a combined endowment value of $500 billion. Yet, at HBCUs who comprise approximately three percent of the nation’s college and universities have combined endowments of roughly $2.5 billion or 0.5 percent, while 30 colleges/universities with the largest endowments hold $260 billion of the pie or 52 percent. Yes, 30 colleges have more in endowments than 2 970 colleges and universities combined and over 100 times the amount one hundred HBCUs hold in their coffers. HBCU endowments are not even representative of their representation. Who is to blame for such an anemic number? Well, ironically if you ask many African Americans they will lay the blame at the feet of HBCUs and the alumni who attended them for not giving back as they should. The irony of course being that ninety percent of African Americans who attend college today choose to do so at non-HBCUs. At the University of Phoenix, a for-profit college, almost twenty percent of its 213 000 student body is African American. An amount equal to roughly ten percent of the entire HBCU student population. This despite the University of Phoenix’s degrees not being worth the paper they are printed on, but they are not a Black institution so therefore it must be a better education, right? Never mind the percent of African Americans who decide to attend elite PWIs and take their intellectual capital out of the African American ecosystem. We are quite literally using our intellectual capital to build others research and academic prowess and deepening the institutional gap between African America and the rest of America.

The economic cost of abandonment by African American to HBCUs is hard to put an accurate figure on because the $125 that the African American graduate in 1969 did not donate to an HBCU and a bunch of probability factors would require a doctoral thesis and years of research, but an abstract analysis is possible. To note, for every $125 in 1969 that had been invested in the stock market with traditional returns would be worth just under $23 000 today, which in a moment you will see the relevance. Currently, there are approximately 20 million Americans in college, African America comprises 3 million of that population, and 2.7 million of that 3 million attend non-HBCUs. The average annual cost of college in the United States is $22 000 annually, valuing African America’s tuition revenue at $66 billion annually, but $59.4 billion of it is in non-HBCUs. HBCUs as a whole receive only 1.5 percent of America’s total current tuition revenue pie. When it comes philanthropy, numbers are even starker. In 2015, HBCUs received only 4 of the 530 donations (0.7 percent) that were $1 million or more to colleges and universities. Those four donations totaled $7 million, while the the top four to non-HBCUs combined for $950 million. The latter being an amount equal to almost 40 percent of HBCU endowments combined. Yes, in one year, four donations to HWCU/PWIs equalled almost half of what has taken HBCUs over one hundred years to accumulate.

Philanthropy for colleges ultimately boils down to two things. Either have a very large alumni base or produce very wealth alumni who procure their money through high-paying professions or entrepreneurial pursuits. The first sometimes increases the odds of the second, but there are certainly other factors as well. However, the first is the easiest to ensure a larger endowment just based on statistics. Inside Higher Education reported, “The participation rate in 2014 was 8.3 percent, compared to 8.7 percent in 2013. At private liberal arts colleges, which as a group always have higher alumni giving rates, about 20 percent of alumni donate.” That means that overall, out of every 100 students who attend college, eight of them will be active donors. A number that swings widely depending on the engagement of the school’s development office, alumni associations, etc. Or in the current case of the estimated 300 000 students at HBCUs, only 24 000 of them are likely donors. Yet, obviously if instead of only ten percent of African American students attended HBCUs, ninety percent did, then you would have alumni donor pool of 216 000 or nine times greater.

HBCUs must go for numbers because over the past sixty years as we abandoned our institutions (except the church) our wealth also plummeted post World War II. As a result today, African American median wealth according to the Laura Chin via the U.S. Census, “In absolute terms, the median white household had $111,146 in wealth holdings in 2011, compared to $7,113 for the median black household and $8,348 for the median Latino household.” The melancholy of HBCUs primary donor pool suffers the compounding impact of being sixteen times poorer and attracting only 1 out of 10 of the population it was built to serve coupled with only eight percent of the 1 out of 10 giving back. That means in essence over the past thirty years, less than one percent of African Americans who attended college from all colleges will have donated to an HBCU. A somber reality no matter how you look at it. Especially when you are trying to maximize the dollar given to have the most impact on African America.

However, recent events have shown there might be a resurgence in the long-term outlook for HBCU endowments. African American owned banks and credit unions have seen a resurgence as millions in deposits have poured back into their coffers as African America looks to gain more control over their communities. In recent years, HBCUs like Morehouse, Claflin, and Langston University have seen record breaking numbers of freshmen classes. This will only bode well for the future of that eight percent donor pool and the probability of $1 million or more donors as African America is creating more businesses than any other group in America currently, a key to wealth creation. The past 60 years may have been the dark ages for HBCUs and their endowments, but a new golden age maybe on the horizon indeed. It maybe time to set that dinner table after all.

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HBCU Medical Schools Lead Gifts Of $1 Million Or More To HBCUs in 2015


If you have something to give, give it now. – Mark Bezos

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After only one donation of $1 million or more to HBCU in s 2013, in 2014 HBCUs landed an astounding nine, but the upward trend was not to continue. In 2015, HBCUs landed just four of the 530 donations that were of $1 million or more that found there way to American colleges and universities. That equates to 0.75 percent, while HBCUs constitute approximately three percent of the country’s higher education institutions. The nine donations in 2014 were a combined $20.5 million, while 2015’s foursome combined for $7 million.

Leading this year’s donors was Hammerin’ Hank Aaron with a donation of $3 million to the Morehouse School of Medicine. The baseball legend’s donation according to the press release by the school, “will be used to expand the Hugh Gloster Medical Education building and create the Billye Suber Aaron Student Pavilion.” However, the wealthiest donor among the group was billionaire Bill Gross, co-founder of the PIMCO investment firm with $1.5 trillion in assets under management, and his wife. Their donation was second among the group with a $2 million gift to Charles Drew University of Medicine & Science. HBCU medical schools are leaders within the HBCU research community constituting three of the top ten HBCU research institutions. These donations should only strengthen that resolve.

With African American owned banks seeing a huge engagement in 2016, it is possible that this may translate to institutional investments for HBCUs if the seeds of current sentiment are nurtured by leadership. This is an opportunity that HBCUs simply can not afford to miss, both financially and socially. Especially considering the higher education arms race for donors and the top four HWCU/PWI donations totaling $950 million in 2015. Building relationships with African American athletes and entertainers as donors as well as looking abroad in the African Diaspora would greatly increase the possibility of landing more of the eight and nine figure donations that are desperately needed.

The growth in the number of $1 million or more donations is a positive if it continues, but the amounts as well need to see dramatic increases as well for us to make sure our institutions are viable for generations to come.

1. Hank Aaron – $3 Million
Recipient: Morehouse School of Medicine
Source of Wealth: Transportation

2. William H. & Sue Gross – $2 Million
Recipient: Charles Drew University of Medicine & Science
Source of Wealth: Finance, Investments

3. Charles Barkley – $1 Million                                                                     Recipient: Morehouse College
Source of Wealth: Entertainment

4. Jimmie Edwards – $1 Million                                                                          Recipient: Dillard University
Source of Wealth: Chemicals

Source: The Center for Philanthropy

Nine Donations Of $1 Million Or More Find Their Way To HBCUs in 2014


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Never respect men merely for their riches, but rather for their philanthropy; we do not value the sun for its height, but for its use. – Gamaliel Bailey

There was thankfully almost no where to go but up after The Center for Philanthropy’s 2013 database reported HBCUs garnered only one $1 million or more donation out of the 559 to colleges and universities. However, with overall $1 million or more donations in 2014 to colleges and universities down 7.5 percent there was not much expectation that HBCUs would see a substantial increase from the previous year. Yet, a substantial increase there was as nine donations of $1 million or more found their way into HBCU hands out of the 517 to colleges and universities in 2014. This represents an increase from 0.2 percent to 1.7 percent of the overall donations year over year.

It is not all glitter and gold though. The gap between the top donations to HBCUs vs. HWCUs highlights both the institutional and household wealth gap that persist in this country. Combined, the nine donations totaled an impressive $20.5 million for HBCUs. Unfortunately if you take the top nine to HWCUs that number is $1.2 billion or 56 times greater. The gap between the largest donations is even bigger. Harvard University received a $350 million gift, while Paul Quinn College received a $4.4 million gift or an amount almost 80 times less. Transformative donors who can change the paradigm of an entire institution with one donation are much harder to come by for HBCUs. Transformative donations can be different amounts for different size institutions, but the definition lends itself to a minimum of $50 million and above for HBCUs. A figure that would double the bottom half of the top ten HBCU endowments and move the needle double digits on the upper half of the top ten HBCU endowments.

So what is holding back these transformative donations to HBCUs? A myriad of factors. Most transformative donors are titans of industry throughout America and the world. Their ownership in corporations and investments lends them the wealth to do such. African America’s disproportionate labor presence in the public sector where incomes are limited, lack of entrepreneurship, and lack of overall investment in our own institutions often aborts the ability for capital to circulate in African America. However, as more HBCUs are creating entrepreneurship centers on their campuses this could prove in the long-term a positive shift. In the short term, there has to be more emphasis on securing donations from the likes of African American celebrities willing to both give seven figure donations and lend their public capital to the institutions in the way of attracting more donors. That is if HBCUs can throw off their issues of being donor image conscious.

The growth in the number of $1 million or more donations is a positive if it continues, but the amounts as well need to see dramatic increases as well for us to make sure our institutions are viable for generations to come.

1. Trammell S. Crow – $4.4 Million
Recipient: Paul Quinn College
Source of Wealth: Family wealth, Real estate

2. Alfred C. Liggins – $4 Million
Recipient: Howard University
Source of Wealth: Media and entertainment

3. Ada Cecilia Collins Anderson – $3 Million                                                  Recipient: Huston-Tillotson University
Source of Wealth: Insurance, Real estate

4. Anonymous – $2.1 Million                                                                          Recipient: Virginia Union University
Source of Wealth: N/A

5. Anonymous – $2 Million                                                                             Recipient: Stillman College
Source of Wealth: N/A

6. Steve and Anne Pajcic – $2 Million                                                        Recipient: Edward Waters College University
Source of Wealth: Law

7. Nicholas Perkins – $1 Million                                                                    Recipient: Fayetteville State University
Source of Wealth: Food and beverage

8. Josh Smith – $1 Million                                                                                Recipient: Central State University
Source of Wealth: Consulting

9. William R. & Norma B. Harvey – $1 Million                                                  Recipient: Talladega College
Source of Wealth: Education, Manufacturing

Source: The Center for Philanthropy

 

Paving the Road to Sustainable Alumni Support for HBCUs


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“Philanthropy without scale and sustainability is like any other bad business that will simply wither and die on the vine.” – Naveen Jain

Since 1837 historically Black colleges and universities (HBCUs) have played a vital role educating students. Prominent activists and scholars including Nikki Giovanni, Toni Morrison and Thurgood Marshall benefited from attending HBCUs with supportive environments. The emphasis on cultural pride, scholarship and political acumen transform the lives of students from underserved communities. In comparison to predominantly White institutions (PWIs), HBCUs enroll more underserved, first generation and minority students. Upon their arrival on campus students are surrounded by majestic trees, serene suburban landscapes or colorful urban enclaves. However, despite their idyllic settings HBCUs are at a crossroads. The closing of Saint Paul’s College in 2013, Morris Brown College’s bankruptcy filing in 2012, Lewis College of Business uncertain status, and nine other HBCU closings over the years highlight the fragility of HBCUs in through the years into the present. Ensuring our institutions remain viable is predicated on the financial support of alumni, administrators, faculty, stakeholders, students and trustees.

Dramatically increasing donations to HBCUs would alleviate the financial strain that has plagued prominent institutions including South Carolina State and Grambling State University. Unfortunately several factors have contributed to the financial crisis at HBCUs including: inequitable funding, shifting federal and state policies and limited alumni contributions. To the last point, HBCU Money found that only 1 out of the 559 $1 million or over donations to colleges in 2013 and 9 out of the 517 $1 million or over donations in 2014 to colleges went to HBCUs.  Although HBCU alumni are among the most dedicated graduates they are more likely to come from underserved communities and leave with more loan debt in comparison to students from larger PWIs. The stark difference between HBCUs and PWIs regarding alumni contributions and endowments is problematic. For example, Harvard University’s estimated $30 billion endowment far exceeds Howard University’s estimated $586 million endowment. Pundits would argue that comparing Harvard and Howard is unfair; however, the funding gap reflects the uphill battle HBCUs have encountered since their inception.

While HBCUs face challenges overcoming fiscal crisis, the Black community has always worked together collectively to avert financial disaster. For instance, the efforts of alumni and students at South Carolina State highlight the importance of exerting political pressure to ensure our institutions remain open – political capital that is a lot easier to build and exert if the community wielded more economic power. Despite the trials and tribulations HBCUs are allying with supporters to challenge the non-HBCU owned media’s deficit orientated focus. Increasingly administrators and alumni are taking steps to change the narrative regarding HBCUs focusing on their history fighting for Civil Rights. The renewed emphasis on social justice and growth of social media could become a rallying point for stakeholders. Recently, HBCU alumni have raised money to increase institutional aid for students from underserved communities.

The I Love Howard campaign is an example how HBCU graduates are using social media and grassroots efforts to galvanize graduates. Led by Howard University alumnae Michelle Jayne, Jessica Neal and Rochee Jeffrey the campaign is making strides engaging alumni and supporters to protect Howard’s legacy. Ensuring post-secondary institutions including Howard have networks that are fighting for increased funding could turn the tide for HBCUs. For instance, fundraisers, online telethons, social media campaigns, after work mixers and private/public partnerships are practical options for alumni.

Encouraging students to identify conventional or unconventional methods to increase donations should begin freshman year. Campaigns that urge students to give as little as $1 highlight the important role donations play in sustaining critical programs. Without support from alumni HBCUs are susceptible to cuts in federal and state funding that hamper efforts to recruit talented students. Schools including Claflin University recognize increasing donations is linked to the institutions future success.

Claflin, 2015’s HBCU of the Year, received funding from the Kresge Foundation and the United Negro College Fund to strengthen fundraising efforts. Claflin designed a campaign encouraging alumni, faculty, parents and students to donate. In 2013, the alumni giving rate increased nearly 10% from 43% to 52%. This year the university announced they raised nearly $90 million for phase one of the capital campaign. The success of Claflin underscores the commitment from supporters. HBCUs with a low alumni giving rate should use Claflin as a template to increase overall support. Strengthening HBCUs through campaigns can fund endowments, repair and renovate dilapidated facilities and recruit students.

Ensuring HBCUs continue their mission educating African American students is linked to financial support from alumni and students. Although HBCUs enroll more students from underserved communities in comparison to PWIs they are equipped to encourage alumni to provide critical funding. For example, Black greek letter organizations, concerts, football classics, homecoming and regional alumni events present opportunities to reach out to newly minted graduates. In addition, developing partnerships with African American (and African if they are really ambitious) corporations and philanthropic organizations are important for institutions dependent on external funding. The future for HBCUs is bright, but increased donations will ensure they develop a new cadre of entrepreneurs,  Nobel Laureates and Pulitzer Prize winners.

The Endowment Edge: A Conversation With The University Of Virgin Islands’ Dr. Haldane Davies


HBCU Money’s editor-in-chief, William A. Foster, IV, sits down with the Foundation of the University of Virgin Islands’ executive director Dr. Haldane Davies. They discuss the importance of HBCU endowments, UVI’s phenomenal leap into the HBCU Money’s 2014 top ten HBCU endowments list, and Dr. Davies take on the economy’s impact on college endowments.

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Dr. Davies, thank you for taking the time with us. Let us start with telling us a bit about yourself and how you came into your current position? Thank you, Bill. I am certainly honored to have the opportunity to speak with you today and to share with your audience what the Foundation for the University of the Virgin Islands and indeed the University of the Virgin Islands has been doing over the last fifty three years of its existence. My name is Haldane Davies and I am from the Virgin Islands. I hold a Doctor of Philosophy degree in Educational Administration with a focus on higher education from Andrews University and have been at the University of the Virgin Islands for the past eight years. In addition to my current position of Vice President for Business Development and Innovation, I also serve as the Executive Director of the Foundation for the University of the Virgin Islands – a 501 (c) 3 organization, a position that I have held for the past four years.

Many HBCUers do not understand the way an endowment operates. Tell our audience more about the process. When a donation to the University of Virgin Islands is given, how is it invested and how are those decisions made? Great question. As you know, Bill, the process of fundraising is one that occurs over time after periods of relationship building and donor cultivation. Donors contribute to a cause that matches the institution’s value proposition to the donor’s vision and purpose for which they intend the gift to be used. Therefore, when a gift is made to the University or to the Foundation on behalf of the University, that gift is invested in accordance with the donor’s gift agreement and the applicable clauses of the Foundation’s Investment Policy Statement under the guidance of the Finance and Investment Committee and the full Board. The funds are usually distributed across an approved asset allocation planning model with investments in equities, bonds, and other alternative asset classes, with provisions made for hedging by including a mix of other investment options along a continuum of conservative and aggressive distributions of the funds to be invested. The Finance and Investment Committee would be mindful to ensure that great care is taken to maintain an adequate spending ratio in support of the University while making every effort to maintain the goal of achieving intergenerational equity by not spending too much or too little in any given year thereby maintaining the real spending power of the endowment for future generations.

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 The University of Virgin Islands this year cracked our HBCU Money™ top ten HBCU endowments, largely attributed to the university’s impressive 48.5 percent increase in investments. What do you attribute to the endowment’s success over the past twelve months? I must say that we are extremely honored to be among the top ten HBCU endowments in terms of investment asset I would be the first to indicate however, that while the difference between total investment assets from 2013 to 2014 jumped significantly by an impressive 48.5 percent, the actual investment return for the same period was 19.2 percent, which exceeded investment returns among all HBCUs that participated in the NACUBO Commonfund Study of Endowments. This is indeed a great accomplishment of which we are justly proud. We are appreciative of the outstanding work of our investment advisors/managers who exercised prudent judgement and responsible decision making by selecting outstanding investment managers and investment options that yielded the kind of returns that we benefited from last year. It was a good year for the U.S. equity market, in particular. I am also mindful to note the fiduciary oversight of the Finance and Investment Committee and the Board in working closely with our advisors/managers and exercising patience by maintaining a “we are in it for the long haul” attitude toward investing.

The endowment gap between PWI/HWCUs and HBCUs has grown from 46:1 in 1993 to 106:1 today. What do you think are some ways that gap can start to be closed, especially with HBCUs facing mounting financial pressure? Is there anything the University of Virgin Islands is doing in particular? As stated previously, the Foundation for the University of the Virgin Islands has taken a “long haul” approach to investing for optimal gain in support of the mission of the University. The University actively engages in fundraising and maintains a Memorandum of Understanding (MOU) with the Foundation for the management of its assets alongside those of the Foundation. There is strength in the collaborative pooling of assets with the true intent and purpose of strategically and meaningfully responding to the needs of the University and the constituencies which it serves. As HBCUs, we also need to actively engage in business development and innovation activities that result in public/private partnerships, contracting services, and leveraging the expertise of faculty, staff and students to create income generating opportunities in collaboration with the institution. At UVI we believe that when we are able to promote a value proposition that is in tandem with the needs of our communities, donors, and supporters we would be better positioned to reverse the trend and begin the process of closing the gap to which you referred. Although budgets are tight and government and other types of mainstream support for HBCUs and other institutions are dwindling, there are opportunities for growth if we would develop innovative ways of advancing our causes through collaborative strategic planning, linking the budget to the plan, identifying the best talent to execute programs and services, conducting rigorous and meaningful assessment, and using results to improve. These may be the “worst of times” but they may also be the “best of times.”

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 In terms of investment strategy, does UVI primarily internally manage its endowment; use external managers, or a mixture of both? UVI through the Foundation primarily uses external managers who are guided by the organization’s Investment Policy Statement, and who have the flexibility within reasonable limits to make timely investment decisions in the overall interest of the Foundation and the University. We vet and monitor our managers well and require regular reports not only on the performance of the funds but also on their investment point of view and scenario projections based on current and historical market data.

The S&P 500 over the past year had returns of 13.4 percent. The benchmark by which we measure endowment return success. This past year only six out of the top ten HBCU endowments outperformed the market, while PWI/HWCU counterparts had nine out of the top ten outperform. What do you attribute this disparity too? That is a very good question and the answer may lie in a number of places. Generally, although size may not always be a determining factor in the level of endowment returns, it certainly plays a significant role especially in keeping with the asset allocation model that may be right for the institution at the time. PWIs generally are much more heavily endowed than HBCUs with higher percentages spread across a wider cross section of illiquid options, thus lessening risk and increasing yield over the long term. Secondly, some endowments are very conservative in their asset allocation models, which may be based on the risk averseness of the Investment Committee. Additionally, we need to do a better job in developing our asset allocation models and using the best managers with track records of stable yet outstanding returns for their clients. We need to study the markets well, increase our knowledge by engaging in professional development activities for our boards, and holding our directors and staff more accountable for the performance of our organizations. Endowments grow and perform well through strategic investment growth and contributions to the funds.

Capital circulation is a big principle we believe in here at HBCU Money. Does UVI have any relationships with African Diaspora owned investment firms or financial institutions in general? If so, was it a conscious decision and why? If not, is there any plan in the future to have a relationship? Although most of our investments are within the US market which includes a mix of investment firms, we certainly participate in private equity investments globally including those in emerging and frontier markets. While I am not at this time prepared to speak in detail on FUVI’s investments, I can say that every effort is made to invest in opportunities and places where our investments stand a very good chance of yielding good returns. We pay close attention to the global economic outlook and point of view and make decisions that would best serve the interest of our organizations – UVI and FUVI. We certainly support investments with African Diaspora investment firms as part of our overall investment strategy.

Many investors seem to believe the Federal Reserve will be raising interest rates this year. What impact will this have on college & university endowments? With every action, there is usually a corresponding reaction, however, our view is long term and we are not unduly alarmed with the current trend of market volatility. Whether the Feds raise interest rates in the summer or the fall, we expect the markets to respond but settle in a favorable place over time. After all, rising interest rates may be viewed as a sign of a strengthening economy. Market corrections are needed from time to time; however, we are not fazed by daily adjustments but rather encouraged by long term performance.

Private equity and hedge funds seems to have had a major role in college and university endowments over the past decade. These are very capital intensive and illiquid investment classes, which seem to make it tougher for HBCUs with smaller capitalized endowments to engage. Is UVI making investments in either of these assets classes? If so, what percentage of the school’s endowment portfolio is in them? If not, do you foresee investments in these classes in the future? We currently have a mix of hedge funds, distressed debt, and private equity investments in our portfolio amounting to about 10 percent of the Foundation’s assets. We are also in the process of adding some core real estate investments (about 5 percent) and making allocation adjustments to help create an optimal balance in liquidity and intergenerational equity. With some limitations, opportunities for smaller endowments to invest in illiquid and alternative strategies such as hedge funds, venture capital and private equity are readily available in the marketplace and offered by advisors/managers who have great expertise and track records in this important diversifying space.

For those interested in one day becoming the head of a university endowment what advice would you give them? Become familiar with endowments and foundations and how they work by attending endowment/investment conferences, workshops and institutes to the extent possible. Speak frequently with your investment managers engaging them in broader board and committee educational meetings focusing on the successful tenets of governance, oversight and endowment management. And examine their investment outlook in tandem with market trends and historical performance. Read, familiarize yourself with the market jargon, be courageous, and engage in strategic and informed decision making.

Thank you for your time; in parting do you have anything you would like to add? HBCUs and their universities and endowments have a very important role to play in providing and supporting educational opportunities for many who may otherwise not have the opportunity to pursue higher education. We are responding to a high calling – a calling that is beyond any of us to touch lives, fulfill dreams, ignite passion, create opportunities, improve the quality of life, advance knowledge, and increase wisdom. HBCU endowments and foundations have the capacity to be wellsprings of creative opportunity and beacons of hope for many in a shaded world. Let us commit to doing our best for humankind today and for generations yet unborn as we help to make this world a better place for all. Thank you so much, Bill for the opportunity to share with your audience. I look forward to talking with you again.