The 20 Year Review: 1993 & 2013 HBCU Endowments Then & Now

Posted on February 4, 2014 by | Leave a comment

By William A. Foster, IV

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The 2013 HBCU Top 10 Endowments list is out. Going forward we will review where HBCUs are today and where they were 20 years ago. NACUBO’s list this year included 849 reporting institutions from the U.S. and Canada. So here are a few fast facts of then and now in regards to HBCUs place in the whole of the endowment conversation.

  • Of the 849 reporting institutions in 2013, only 1.5 percent were HBCUs. HBCUs comprise 3 percent of American colleges and universities. In 1993, Of the 437 reporting institutions in 1993, only 0.9 percent were HBCUs.
  • 20 years ago, the 4 HBCUs who were present on the list had a combined endowment value of $329 135 000 versus the top 4 HWCUs who had a combined endowment value of $15 137 350 000.
  • The endowment wealth gap between the top HWCUs/HBCUs in 2013 was 103:1. In 1993, it was 46:1.
  • In 1993, 16 HWCUs reported endowments over $1 billion and 2 HBCUs reported endowments over $100 million. There were 83 HWCUs in 2013 with reported endowments over $1 billion or an increase of 518 percent. HBCUs increased their ranks of $100 million endowments from 2 to 5 or an increase of 150 percent.

The numbers are disturbing. There are a number of contributing factors to the institutional wealth gap increase. Because institutional wealth factor tends to directly correlate with individual wealth gap, then it should be no surprise that the wealth gap has ballooned and not closed as often perceived. Shrinking HBCU alumni pools are a major factor for this growing gap. An increased pressure in the coming generation will be present as alumni of HBCUs are more likely to graduate with student loan debt and higher student loads making it even harder for development offices to ask for contributions. Fiscal trends are not currently in HBCUs favor unless a real turnaround happens among its ability to recruit more African American high school graduates. Currently, only 10-13 percent of African American high school graduates are choosing HBCUs. A problem compounded with African Americans having the lowest high school graduation rate in the country among all groups. The arms race to increase student bodies and in turn alumni pools is largely based on the aforementioned issues of alumni having less to give because of the student debt loads of the current generation of graduates. There are of course other factors, but at the very heart of this matter this can not be understated in the contribution to the widening gap between HWCU/HBCU endowments.

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HBCU Money’s 2013 Top 10 HBCU Endowments

Posted on February 3, 2014 by | 12 comments

Piggy-Bank-w-Blackboard

The keyword for  2013’s HBCU endowments – rebound. In the past twelve months, the top ten HBCU endowments recouped the $100 million they lost in 2012. Meanwhile, the top ten HWCU endowments increased by $12.5 billion. The institutional wealth gap between HWCU/HBCU endowments increased from 102:1 to 103:1 times between top ten endowments over the past twelve months.

There was some real shakeup among the HBCU top ten this year with Morehouse School of Medicine and Bethune-Cookman University falling out of the top ten making room for newcomers. It is unclear whether the two institutions simply failed to report on time or had significant enough declines to drop out of the top ten. The top five remains unchanged and they remain the only in the $100 million endowment club for HBCUs. Tennessee State University makes the biggest leap in the top ten going from the nine spot up to six. Winston-Salem State University finds their way back on the list at number ten after being booted last year by Virginia State University. The new kid on the block is North Carolina A&T State University at number nine, and led all reporting HBCUs with the highest return on investment with an amazing 17.5 percent. Spelman’s endowment rebounded, but concerns are present as they returned only 5.8 percent on their endowment which is the lowest among the top ten. This comes after having the third worst return last year among the top ten and raises real questions on whether they can challenge Howard for the first to the $1 billion mark. The MEAC continues its domination with four institutions among the top ten for the second year in a row, while the CIAA holds two spots and Fayetteville State University sits just outside of the top ten. Despite a minute endowment of $2.2 million, Texas College for the second year in a row returns a stellar return at 16.7 percent.

As always if you do not see your HBCU in the top 10 – DONATE!

Endowment in millions (Return On Investment)

1. Howard University

$513 667 (11.5%)

2. Spelman College

$327 171 (5.8%)

3. Hampton University

$254 103 (9.3%)

4. Meharry Medical College

$124 965 (11.1%)

5. Florida A&M University

$115 281 (7.0%)

6. Tennessee State University

$42 970 (13.4%)

7. Texas Southern University

$42 179 (11.1%)

8. Virginia State University

$38 192 (15.3%)

9. North Carolina A&T State University

$32, 959 (17.5%)

10. Winston-Salem State University

$29 543 (13.8%)

Take a look at how an endowment works. Not only scholarships to reduce the student debt burden but research, recruiting talented faculty & students, faculty salaries, and a host of other things can be paid for through a strong endowment. It ultimately is the lifeblood of a college or university to ensure its success generation after generation.

Understanding_University_Endowments[1]

Additional Notes:
NACUBO Average Endowment – $537 213 (10.0%)
NACUBO Median Endowment – $101 192 (12.3%)
Top 10 HWCU Endowments combined – $154.7 billion
Top 10 HBCU Endowments combined – $1.5 billion
Source: National Association of College & University Business Officers

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HBCU Money™ Business Book Feature – Black Horizons: One Aviator’s Experience in the Post-Tuskegee Era

Posted on February 2, 2014 by | Leave a comment

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Black Horizons is the memoir of an orphan who went from the bottom to become a pioneering aviator, businessman and politician in the post-Tuskegee Airmen era.

As a poor African-American youngster picking cotton in a 1930s Tennessee field, U.L. Rip Gooch would look to the sky as airplanes flew overhead and think about escaping to a better life. Soon after World War II, he earned his pilot’s license with “Chief” C. Alfred Anderson, but found that racist hiring practices among airlines and other companies did not allow employment of black aviators, even those who gained fame as Tuskegee Airmen.

Rip fought back using business principles instead of violence. In time he built a million-dollar aviation business selling Mooney Aircraft in the Air Capital of the World (Wichita, Kansas), accrued 20,000 flight hours, and became one of the few black politicians in one of the most conservative states in the nation.

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HBCU Money™ Dozen 1/27 – 1/31

Posted on February 2, 2014 by | Leave a comment

high-noon

Did you miss HBCU Money™ Dozen via Twitter? No worry. We are now putting them on the site for you to visit at your leisure. We have made some changes here at HBCU Money™ Dozen. We are now solely focused on research and central bank articles from the previous week.

Research

Astronomy’s carbon footprint is shocking: Let’s reduce it with some green sky thinking l New Scientist http://ow.ly/t9CJI

Stand back Earth. The star next door – Alpha Centauri B – may host a ‘superhabitable’ world l New Scientist http://ow.ly/t9CVb

The amazing inside story of the Texas library with no books l NetworkWorld http://ow.ly/t9DyE

How do flame retardants affect children’s health? l US EPA Research http://ow.ly/t9DTR

A Cryptocurrency Backed By Solar Energy l Clean Technica http://dlvr.it/4qKPNG

Watch HIV spread inside a mouse’s gut l New Scientist http://youtu.be/eT0mQEjepLs (related story http://ow.ly/t9Eg0 )

Federal Reserve, Central Banks, & Financial Departments

Volatility of household income increased about 30%, on average, between 1970s and 2000s l Richmond Fed http://ow.ly/t9Etd

Half the world cooks with solid fuels and faces health risks. l World Bank http://wrld.bg/t86X2

Mexico holds rate, but keeps eye on inflationary pressures l Central Bank News http://dlvr.it/4qJryG

Notes from the Field: Wealth Building–Keeping it Local l Cleveland Fed http://ow.ly/t9F73

Global economic growth acceleration tempered by deflation risks l Dallas Fed http://bit.ly/1edoI9o

In last 30 years, world lost $3.8 trillion to natural disasters. l World Bank http://wrld.bg/t6UwM

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

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HBCU Money™ Turns The Terri(fic) Two

Posted on February 1, 2014 by | 1 comment

By William A. Foster, IV

Knowledge comes by taking things apart: analysis. But wisdom comes by putting things together. — John A. Morrison

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A labor of love. That is what I would have to describe the past two years. An opportunity to change the paradigm. That is what I would describe the ongoing mission of HBCU Money. From the moment of HBCU Money’s conception two years ago (wow, time flies) the intention to become a full-service multimedia financial journalism company was present. We believe that at our footsteps is an opportunity to be at the forefront of economic, financial, and investment information focused on business, countries, and organizations of the Diaspora. An opportunity, that we plan to be at the vanguard of over the coming years. I want to thank everyone for their support, feedback, and suggestions in ways that we can improve the product and service that HBCU Money™ brings to the world. Check out some of the amazing highlights from our terrific second year in business.

  • If it were a concert at Sydney Opera House, it would take about 14 sold-out performances for that many people to see it.
  • Our viewership is up over 600 percent from year one!
  • The busiest day of the year was July 23rd. The most popular post that day was HBCU Money’s 2013 African American Owned Bank Directory.
  • There were visitors to our site from 122 countries. Meaning our viewership has reached 63 percent of the world’s countries!

It is a continued honor to serve as Editor-In-Chief of HBCU Money™ and look forward continuing to do so. There is no time to rest. Enjoy the moment. Now, let us get back to work because as our motto states “Our Money Matters”.

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