Tag Archives: african americans

HBCU Money™ Business Book Feature – The African American Entrepreneur: Then and Now

 

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African American entrepreneurship has been an integral part of the American economy since the 1600s. On the eve of the Civil War, the collective wealth of free blacks was approximately $50 million. In 2006, African Americans earned a whopping $744 billion, a figure that exceeds the gross domestic product of all but 15 nations of the 192 independent countries in the world. As W. Sherman Rogers so ably demonstrates, African Americans have achieved these economic gains under difficult circumstances. Slavery, segregation, and legally limited access to property, education, and other opportunities have taken a heavy toll, even to this day. Besides providing a penetrating glimpse into the world of black entrepreneurship both past and present, this book urges African Americans to gain financial independence as entrepreneurs. Business ownership, Rogers argues, will bring security, wealth that can be passed to successive generations, and educated offspring with much greater earning power.

The African American Entreprenuer: Then and NoW</i> explores the lower economic status of black Americans in light of America’s legacy of slavery, segregation, and rampant discrimination. Its main purpose is to shine a light on the legal, historical, sociological and political factors that together help to explain the economic condition of black people in America from their arrival in America to the present. In the process, the book spotlights the many amazing breakthroughs made by black entrepreneurs even before the Civil War and Emancipation. Profiles of business people from the Post-civil War period through today include Booker T. Washington, pioneer banker and insurer A.G. Gaston, hair care entrepreneur Madame C.J. Walker, Ebony publisher John H. Johnson, Black Entertainment Television founder Robert L. Johnson, publisher Earl Graves, music producer Damon Dash, rapper Sean Combs, former basketball stars Dave Bing and Magic Johnson, food entrepreneur Michelle Hoskins, broadcast personality Cathy Hughes, former Beatrice Foods head Reginald Lewis, Oprah Winfrey, and many more. As Rogers points out, reading about remarkable African American entrepreneurs can inspire readers to adopt an entrepreneurial mindset. To further that goal and help readers take the plunge, he outlines many of the skills, tools and information necessary for business success-success that can help chart a new path to prosperity for all African Americans.

10 People We Wish Were HBCU Presidents

With so many HBCU presidents resigning and retiring we thought it would be a good idea to put together a list of people we here at HBCU Money would like to see take the helm as an HBCU president. HBCUs have been notorious for recycling presidents and thinking very inside the box when it comes to choosing leadership. Our list is anything but inside the box. The criteria for our list included a mixture of strong organization leadership and management, network access that they could tap into for fundraising and policy influence, high achievement background, and ultimately the ability to take our institutions to new plateaus of connectivity to the African Diaspora. Who are some that you would like to see lead an HBCU and why?

MR. KOFI ANNAN – The former secretary general of the United Nations from Ghana served two full terms as the man in charge of the organization that oversees the world’s nations. Needless to say he has the pedigree and connections that an HBCU would drool over. It takes a powerful and humble person to balance the needs, interest, and egos of countries. He would instantly raise the global profile of any HBCU he took the helm of and his strong connections on the continent of Africa would be an amazing asset for building the institutional bridge for HBCUs to Africa.

MS. KIMBERLY BRYANT  – If the early 20th century was the industrial revolution, then the early 21st century will be known as the technological revolution. In an effort to ensure African Americans do not miss out on it there might not be a more important voice than the founder of Black Girls Code. Teach the babies is always a resounding mantra among African American activist, but this is real activism. The doer she is has African American girls coding and engaging the STEM field on a level unmatched. Her connections and understanding of building a strong organization from the ground up and technology connections make her a powerful leader than an HBCU could use.

MR. FRED SWANIKER – Another Ghanian making waves. His pedigree alone as a McKinsey alum makes means he could probably fix or accelerate any HBCU in five minutes (hyperbole intended). Coming from arguably the world’s most prominent consulting firm he is use to solving problems and implementing sound long-term strategy. He has also been a serial entrepreneur and founded the African Leadership Academy, a boarding school in South Africa. Did we mention he is only 34?

DR. CONDOLEEZA RICE – By far the most controversial choice on our list. She was HBCU Digest founder J.L. Carter, Sr’s choice for the next president of Howard in an editorial piece for the publication. Whether it is Howard or another HBCU there is no denying Dr. Rice’s network. Put the politics aside, she is a brilliant woman who has ascended to powerful positions in ways that very few African Americans have under not one, but two presidents. She has a global profile and is an expert on Russia, which would come in handy for any HBCU looking to develop its international programs.

MRS. TERI WILLIAMS COHEE – The co-founder, chief operating office and senior vice president at the nation’s largest African American owned bank. After taking over a small Boston bank she helped build OneUnited bank into the only African American bank with a national footprint. She understands the importance of tying African American institutions together. Currently, there are only two HBCUs (Roxbury Community College & Florida Memorial University – both with OneUnited) that bank with African American owned banks. We are sure this would change in a hurry with Mrs. Cohee at the helm of an HBCU. She has a rich financial background and would certainly have any HBCU she is at the reigns of in top financial shape – even the financial aid department.

DR. NEIL DEGRASSE TYSON – STEM here, STEM there, STEM everywhere. We have already mentioned how important STEM has become and there might not be a higher profile African American in STEM than Dr. Tyson. He has spoken before congress on numerous occasions to increase funding to NASA programs and other STEM R&D programs. An opportunity to create an elite research program, recruit and develop strong STEM faculty, and develop cutting edge programs would definitely be to any HBCU’s favor.

MR. DAVID LAMMY – Here come the British. The first of two Afro-Britons make our list. In 2008, he was considered the eighth most powerful Afro-Briton male. At one point he was the UK’s Minister for Innovation, Universities, and Skills. He could open up recruitment for an HBCU to tap into the recruitment of Afro-Briton pipeline. Also, he founded and chairs programs to address improvement and development of black fatherhood initiatives. Bringing such an initiative here with his connections could bring in much needed research funding to an HBCU focused on community and social development.

LADY PATRICIA SCOTLAND – Our second Afro-Briton on the list and at one time the Guardian’s most powerful black woman in the UK. She has strong connections in the Caribbean where her family has a rich land ownership history. Her background as a family law attorney and judge in the UK has allowed her to rub elbows with Britain’s affluent, which would bring in much needed funding to an HBCU that she presided over. Her time as a minister of state like the aforementioned Mr. Lammy gives her strong organizational management skills to oversee a college and give it direction.

LT. GENERAL THOMAS BOSTICK – The head of almost 37 000 civilian and military engineers just may know how to run a high pressured organization. That is what Lt. General Bostick does as the head of Army Corps Engineers. The ACE has a R&D division meaning it is constantly trying to remain at the cutting edge of engineering development. Any HBCU with a strong engineering history or wanting to develop one should put in a call. Having access to funding from the department of defense would not hurt either.

DR. MICHAEL BLAKEY – Having oversaw the African Burial Ground National Monument project where they discovered the remains of 400 men and women and traditions associated with West Africa while at Howard University. He knows, loves, and appreciates the HBCU culture, but recognizes that there are changes that need and must be made to ensure HBCUs are at the forefront of the next generation.

Twitter’s IPO – African America Creates Billionaires, Just Not Themselves

To be thrown upon one’s own resources, is to be cast in the very lap of fortune. – Benjamin Franklin

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At this very moment, I am watching the Twitter IPO and there is money flowing into the streets. The company’s initial IPO price was set to be $15-17, then rose to $25-27 on the eve of its IPO, and upon its actual first trade opened at $45.10. Seventy million shares just went from a value of $1 billion to over $2 billion. Evan Williams, co-founder and largest shareholder, just saw his net worth climb by $2.5 billion. Goldman Sachs, the lead investment bank for Twitter’s IPO, is set to take home almost $30 million of the $60 million in fees this IPO generated. The New York Stock Exchange lands a coup for pulling a major tech IPO from under NASDAQ’s nose after their Facebook debacle. What is not in any of that money? African America. Well, sort of.

African America’s presence is in Twitter from the place it typically is – as a consumer. While African Americans account for 13 percent of the United States population, we account for 22 percent of Twitter users. In terms of daily usage, we account for 11 percent, while European Americans usage is 4 times less than that. To say we have a dominant presence on Twitter would be something of an understatement. If African Americans left Twitter in mass, investors would be clamoring for bomb shelters as the stock would probably fall a part. So why are we not present where it matters most? Do we even know where it matters most?

When it comes to the capital markets picture of Twitter, we are completely absent. There were no African American underwriters present on the company’s S-1 filing. Again, part of that $60 million dollar pie in fees. In terms of early money or venture capital, there were no African Americans with significant investment in the company. Although, it is at least rumored that P. Diddy at one point tried to buy the company. Commendable on one hand and laughable on the other given his financial worth. By the time this company would have even been on Diddy’s radar it was already being valued at upwards of $1 billion – twice his net worth. As Chris Rock often reminds us there is a difference between rich and wealthy.

Sadly, this IPO highlights an all too often reality in African America’s economic behavior. We often are the suppliers of the content, but rarely if ever control the mediums of distribution. We often consume the product, but rarely are we the finance or investment behind its creation. Much of what I am saying here is repeated old hat, but it is worth repeating over and over again until the mindset and behavior indicates some movement of change. These are just some things to ponder the next time you are sending out your next 140 characters.

HBCU Money™ Business Book Feature – The Color of the Land: Race, Nation, and the Politics of Landownership in Oklahoma, 1832-1929

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The Color of the Land brings the histories of Creek Indians, African Americans, and whites in Oklahoma together into one story that explores the way races and nations were made and remade in conflicts over who would own land, who would farm it, and who would rule it. This story disrupts expected narratives of the American past, revealing how identities–race, nation, and class–took new forms in struggles over the creation of different systems of property.

Conflicts were unleashed by a series of sweeping changes: the forced “removal” of the Creeks from their homeland to Oklahoma in the 1830s, the transformation of the Creeks’ enslaved black population into landed black Creek citizens after the Civil War, the imposition of statehood and private landownership at the turn of the twentieth century, and the entrenchment of a sharecropping economy and white supremacy in the following decades. In struggles over land, wealth, and power, Oklahomans actively defined and redefined what it meant to be Native American, African American, or white. By telling this story, David Chang contributes to the history of racial construction and nationalism as well as to southern, western, and Native American history.

90 Percent of HBCU Graduates Have Student Loan Debt

At the bottom of education, at the bottom of politics, even at the bottom of religion, there must be for our race economic independence. – Booker T. Washington

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A recent internal study by HBCU Money using data compiled by the Project on Student Debt paints a very grim picture for HBCU graduates. If one is to couple these results with the current financial demographics of income and wealth for African America as a whole it starts to beg the question if we did not put the cart before the horse. An educated African American population completely dependent on private employment controlled by other communities and copious dependency upon public sector jobs for which we ultimately have little control over. Historically, that argument is seeded in the debate between the philosophies of Booker T. Washington and W.E.B. DuBois. Washington believed that economic development should have occurred prior to development of the liberal arts within African America. Dr. DuBois favored agitation for social change and access to mainstream institutions. Parts of his philosophy would serve as a precursor to the integration movement a generation later that some would argue left African American institutions socially and financially crippled thereafter.

HBCUs served 99 percent of the African American population obtaining higher education prior to desegregation while today that number has dwindled to the neighborhood of 10 percent. This steady but rapid decline over the past 60 years has had long-term impacts on HBCU endowments not least among them the probability of producing high quality donors and large alumni populations. The latter being integral since only an average 13 percent of alumni donate nationwide. 13 percent of a small pool of alumni who have 50 times less wealth than the two leading diaspora groups in America did not and does not bode well for HBCU endowments closing the endowment gap. HBCUs losing 90 percent of their core demographic over the past 50 years has made its pool of alumni significantly smaller than it otherwise would have been and therefore indirectly had a significant impact on HBCU endowments. As a result, today’s education seekers at HBCUs are almost guaranteed to graduate with student loan debt and a significant amount of it while being expected to close the wealth gap despite only earning $0.46 for every $1.00 their Asian American counterpart earns. Unfortunately, many in HBCU leadership refused to adjust to this reality then and now – as we see in the continued chase of athletic budgets that could be going toward general student aid.

The results were paired against America’s 50 largest universities by endowment which surprisingly varied by geography, public and private status, and school size eerily similar to that of HBCUs. The Project on Student Debt reports that 66 percent of all college graduates will have student loan debt and average debt of that graduate is $26 600. Again, the number in parentheses shows the comparative results from the universities of the 50 largest endowments.

Median debt of HBCU Graduate – $28 786 ($21 713)

Proportion of HBCU Graduates with debt – 89% (46%)

Nonfederal debt, % of total debt of graduates – 8% (27%)

Pell Grant Recipients – 70% (17%)

These statistics show that HBCU students are 35 percent more likely to graduate with debt than the national average and 93 percent more likely to graduate with debt than someone from a school with a top 50 endowment. Unfortunately, there is no way to break out the African American student loan debt data of those attending those HWCUs which would help control for family resources playing an integral part in the difference. It is hard not to speculate that given top 50 endowments ability to provide more low-income based aid that the student loan debt is potentially lower for African Americans at HWCUs both in terms of percentage of those graduating with debt and how much debt. It should be noted though that these low-income students are usually academic overachievers and rarely run the academic gambit that HBCUs serve. Despite HBCUs on a whole being cheaper to attend, students are still finishing with 8 percent higher debt than the national average and 33 percent higher debt than those at a top 50 endowment institution. At first examination nonfederal debt (private loans) as a percentage of a graduate’s debt appears to be an HBCU advantage in that only 8 percent of HBCU graduates debt is composed of private loans versus 27 percent for those at a top 50 endowment institution. Further examination though suggest this is a result of family resources. African American families are less likely to have access to the capital and credit to secure private loans which can often be the difference between a student’s ability to stay in school and having to drop out for a variable amount of reasons. The lack of private debt has strong correlation between the institutional weakness of African American owned financial firms primarily banks and credit unions. Lastly, Federal Pell Grant percentage is a fairly direct reflection of the median net worth of African America which is last among all diaspora groups in America according to the latest Pew research.

We could spend years playing the blame game of why this situation is as it is. Unfortunately, African America does not have that kind of time. Student loan debt is fast becoming the current and upcoming generation’s means of separating the have and have not in terms of wealth and asset accumulation. A wealth gap that has grown from $85 000 to $237 000 over the past 25 years according to the Economic Policy Institute between African Americans and European Americans. The reality is that even if we could take student loan debt down to zero for our graduates the wealth gap would still be quite pronounced and an uphill struggle would exist. However, HBCUs can start to do their part by not making an already burdensome situation worse with more creative means of reducing student debt loads. An out of the box approach to this situation is needed and recognition that the African American financial situation is unique and more importantly in crisis. Mimicking the “American” higher education institutional strategy without taking into account the African reality is a recipe for disaster. Alumni, administrators, and our community must take up solving this problem because “education at any cost” is something we simply can not afford.