Tag Archives: endowments

HBCU Money’s 2016 Top 10 HBCU Endowments


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2016 was a rough year for the world, it was even afforded a scary movie trailer, and top ten HBCU endowments were not spared the carnage. Eight out of the top ten HBCU endowments saw negative changes in their market value. The only two to be spared the rod were Meharry Medical College and rising supernova, University of Virgin Islands, who not only led all HBCUs in market value percentage increase, but was second among all American and Canadian institutions reporting in that category. Howard University continues to hold the number one spot and sheer inertia could carry it onto becoming the first billion dollar HBCU endowment. However, after being the star of the top ten last year, Howard finds itself the dog of the show this year with the worst market value percentage performance.

Since breaking into the top ten a few years ago, University of Virgin Islands continues its ascension up the ranks. It is clear they have the special sauce in the islands and if the winds continue in their favor, then the school in Nassau could give HBCUs its sixth endowment over $100 million in short order. Another notable endowment, Texas College with an endowment of only $3.2 million, did see the second highest market change percentage of HBCUs at 6.8 percent.

After a notable absence last year, Florida A&M University, has returned to the list and takes its place as HBCU nation’s fifth endowment over $100 million. This in comparison to 93 of the 799 HWCUs reporting with endowments over the $1 billion mark. Reminding us there is a long way to go before institutional economic equality is achieved.

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

Endowment in millions $000 (Change in Market Value*)

1. Howard University – $685 775  (-8.5%)

2. Spelman College – $346 789 (-4.5%)

3.  Hampton University – $253 814 (-3.6%)

4.  Meharry Medical College – $142 703 (2.6%)

5. Florida A&M University – $113 117 (N/A)

6.  University of the Virgin Islands – $54 968 (60.4%)

7.  Tennessee State University – $50 246 (-2.3%)

8.  Texas Southern University – $48 163 (-1.1%)

9.  North Carolina A&T State University  – $48 074 (-0.1%)

10. . Virginia State University – $45 812 (-3.4%)

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.

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*Note: The change in market value does NOT represent the rate of return for the institution’s investments. Rather, the change in the market value of an endowment from FY2015 to FY2016 reflects the net impact of: 1) withdrawals to fund institutional operations and capital expenses; 2) the payment of endowment management and investment fees; 3) additions from donor gifts and other contributions; and 4) investment gains or losses.

** Notable exclusions to the list that HBCU Money believes would otherwise make the top ten are Morehouse College, Tuskegee University, and Dillard University. These HBCUs have never reported their endowment to NACUBO in the time HBCU Money has been recording its annual top ten endowments.

Additional Notes:
NACUBO Average Endowment – $640 737 (-2.9%)
NACUBO Median Endowment – $120 330 (-1.3%)
Top 10 HWCU Endowments combined – $182.5 billion
Source: National Association of College & University Business Officers

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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.

The HBCU Endowment Feature – Savannah State University


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School Name: Savannah State University

Median Cost of Attendance: $19 703

Undergraduate Population: 4 386

Endowment Needed: $1 728 347 200

Analysis: Savannah State University needs an approximate $1.7 billion endowment for all of its undergraduates to attend debt free. Located in Savannah, Georgia, one of the South’s most historic cities with an estimated population of 142 000. The city’s population demographics are almost 60 percent African American giving it dominant social and political numbers. However, as in most cases the economics do not favor African Americans and null much of the social and political leverage. The most recent endowment numbers for Savannah State University show it to have a current endowment to needed endowment percentage of only 0.15 percent. Like almost all HBCUs the school needs enrollment growth, but for a peer-to-peer comparison it has a sizable population so the endowment size it somewhat a mystery. The halo effect that Atlanta should have on African American college graduates in Georgia should suggest a better fairing for their endowment. This suggest that there is possibly a disconnect between alumni and development. Savannah State University is in one of the premier locations in Georgia and the South. If location matters, then they need to make it a key point in their development strategy. It is one of those few schools that has the potential to skyrocket into the endowment conversation among HBCUs if it can find the right spigot to turn.

The HBCU Endowment Feature – Mississippi Valley State University


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School Name: Mississippi Valley State University

Median Cost of Attendance: $12 872

Undergraduate Population: 2 090

Endowment Needed: $538 049 600

Analysis: Mississippi Valley State University needs an endowment of approximately $540 million for all of its undergraduates to attend debt free. The university is located in Itta Bena, Mississippi which is part of the Greenwood Micropolitan area and has a population of almost 50 000 with over 60 percent of the population being African American. Like all public HBCUs located in Mississippi its income demographics push against the school building a stout endowment. African Mississipians have one of the lowest median incomes in the nation. It has the lowest endowment need of all of the public HBCUs in Mississippi, but it also has the reported lowest current endowment. Despite having access to Jerry Rice’s millions the school has seemingly been unable to garner a large donation commitment from the former alum. The school boast one of the most affordable options in the state and begs the question why its undergraduate population is not more in line with the other two public HBCUs. Population growth is badly needed to deal with the low percentage of alumni giving that all HBCUs face. The university has gotten rid of out of state tuition, which should make it a more favorable destination for surrounding state prospects if it can leverage it. There is much work done to create a healthy endowment for Mississippi Valley State University and while it seems to have the tools at its disposal, it remains to be seen if there will be a strategy implemented to take advantage of them.

As always it should be noted that endowments provide a myriad of subsidies to the university for everything from scholarship, faculty & administration salaries, research, and much more.

The HBCU Endowment Feature – Albany State University


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School Name: Albany State University

Median Cost of Attendance: $17 982

Undergraduate Population: 4 187

Endowment Needed: $1 505 812 640

Analysis: Albany State University needs approximately an endowment of $1.5 billion for all of its undergraduates to attend debt free. It is located in Georgia’s eighth largest city which boast a population of almost 80 000 according to the last census. Albany is also a city where the African American population comprises over 70 percent of the population. The school’s current endowment is only 1 percent of the needed endowment. This is a note of concern given Albany State University has the second highest reported student loan debt per graduates in the SIAC and 90 percent of their graduates have some sort of student loan debt. The 90 percent is actually in line with the HBCU average, but still 35 percent above the national average. Being located in the southwestern part of Georgia gives the school geographic advantage to the panhandle of Florida for recruitment opportunities. Opportunities abound for Albany State University, but key to them will be finding a way to get alumni connected in such a way that their endowment is doubling every year for the next ten years. Otherwise, they will continue to be on the list of schools to watch and we have already seen in Georgia that merger talk is never far away.

As always it should be noted that endowments provide a myriad of subsidies to the university for everything from scholarship, faculty & administration salaries, research, and much more.