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The Conundrum Of HBCUs & American Campus Communities


Glorious shall be the battle when the time comes to fight for our people and our race. – Marcus Garvey

It is often preached that one of the major obstacles to African American economic development is the inability for the African American dollar to circulate within the community. This is often viewed on an individual level by where African Americans shop or eat, but what about at the institutional level? Do African American businesses and institutions like HBCUs also have a role to play in the circulation of the dollar? The answer is without a doubt, yes. Perhaps even more so and more impactful than anything individuals can do. Yet, it seems that when it comes to real estate development and student housing, specifically HBCUs have missed a golden opportunity to circulate millions of dollars within the African American economic ecosystem. To be more blunt, they have failed. That land development is not more revered is somewhat remiss given the lore of the 40 acres and a mule legacy within our communities, but our lack of strategic integration has become others opportunities.

American Campus Communities is a real estate investment trust (REIT) that was co-founded in 1993 by Bill Blayless. Its primary developments are as their name suggest focused on college and universities both on and off campus and primarily housing with some retail mixed in. They have built 206 developments spread across 96 colleges of which 11 have been built on 7 HBCU campuses. Prairie View A&M University, which has a twenty year relationship with ACC,  has the most with four developments with the most recent one opening in 2017. ACC as they are known by their ticker symbol is publicly traded with a market capitalization of $6.1 billion and annual revenue of almost three-quarters of a billion dollars. They have a unique niche in the campus housing development space. However, the story does not simply end there.

If HBCUs are going to do business with developers that are not African American and more importantly HBCU alumni, then there should be something that compels them to do so. A company with an outstanding track record for diversity, a stake of the company in their endowment portfolio, etc. Yet, further examination of American Campus Communities leaves serious questions about exactly who is making the decisions to use them for HBCUs. Of the company’s executive team, senior officers, and board of directors there is not one African American present and no HBCU alumni present either. In fact, there are no ethnic minorities period on the aforementioned groups and only a handful of women. What are decisions like this saying to our community that we so passionately claim to be saying we have the interest of? Are we to believe that there are no African American real estate developers who we trust or are worthy of such projects?

Don Peebles, Sharon Johnson, and Quintin Primo, three African American real estate developers with a combined net worth of almost $2 billion, have developed multi-faceted real estate development corporations and are nationally known certainly would seem more than capable of handling the multi-millions worth of development that happens at HBCUs. There are likely hundreds if not thousands of local African American developers as well like Sharone Mayberry in Houston, Texas who renovated Unity Bank, the only African American owned bank in Texas, and is leading the efforts of renovation in Houston’s historic Third Ward.

It is hardly a surprise that some of these HBCUs are being directed who to use or even having it chosen for them as six of the seven HBCUs who have ACC developments are state schools with Clark Atlanta University being the one private school. Being a public university means that public politics from the gubernatorial office and state politicians have a heavy influence on who receives government and public contracts for work throughout the state. This probably comes with a concerted lobbying effort by ACC to select politicians who make the decisions. The autonomy that state/public schools among the smaller schools (see HBCUs) often marginalizes their decision making while the state’s flagships tend to have the political capital to leverage their own autonomous decisions as it relates to almost every facet of their strategic decision making.

To be clear, this is not a suggestion that all American Campus Communities needs to do is add a token African American to their executive team or board and all is right in the world. That would still not create institutional circulation of the African American dollar and ultimately that is what this is about. If embracing the true circulation and creating a multiplying effect it would take HBCUs concerting with African American financial institutions to sell the bonds that would raise the funds for such construction, then taking that funding and having a request for proposals that ensured HBCU engineers, architects, and developers were a healthy percentage of those who were vying for the bid. Something akin to the Rooney Rule that the NFL uses in ensuring minority coaches get interviewed for head coaching positions that come available. The fact that HBCUs do not seem to be making a more vigorous effort to do this is troublesome.

Time and time again, African American institutions, be it HBCUs, churches, or businesses operate in their own bubble and are not more purposeful in integrating themselves, which makes the dollar within our communities even more difficult to circulate and therefore antagonistic to our institutional economic development. Alumni must deepen their resolve to be involved in not only fundraising for HBCUs, but auditing where those dollars go once they are received. It would be prudent if alumni demanded accountability of just how much of the annual services and products were bought from businesses owned by HBCU alumni. There is a long way to go in moving the needle on circulating our dollars more effectively, but a $10 meal at an African American restaurant versus hundreds of millions in development deals between HBCUs and our own real estate developers is a stark difference in getting us there.

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HBCU Money™ Presents: The George W. Carver 2015’s Top 20 HBCU Research Institutions


HBCUs continue to go backwards in the research field according to the latest National Science Foundation data. In 2014, research expenditures for the top 20 HBCUs combined for $445.4 million, while 2015 combines for $425.7 million. This represents a 4.4 percent drop year over year and 5.5 percent drop from two years ago.

  • The top ranked HBCU is Howard University at 197 and the twentieth ranked Xavier University of Louisiana is listed at 326 in America’s college research landscape.
  • MEAC maintains the way with eight schools versus the SWAC dropping to three after Alcorn State University gave way to XUL.
  • Division II/III schools also comprise four schools on the list, an increase from two in 2014.
  • 1890 HBCUs, land-grant universities, make up for seven of the twenty top HBCU research universities.

Rank. HBCU. Previous Year In Parentheses.

  1. Howard University – $47.3 million ($40.7M)
  2. Florida A&M University – $46.5 million ($46.4M)
  3. North Carolina A&T State Univ. – $35.2 million ($35.0M)
  4. Morehouse School of Medicine – $33.4 million ($41.9M)
  5. Alabama A&M University – $29.2 million ($29.5M)
  6. Tuskegee University – $25.7 million ($24.9M)
  7. Jackson State University – $23.9 million ($26.6M)
  8. University of the Virgin Islands – $20.6 million ($20.4M)
  9. Tennessee State University – $20.0 million ($20.1M)
  10. Delaware State University – $16.0 million ($17.7M)
  11. Hampton University – $14.9 million ($11.2M)
  12. Charles Drew University of Medicine – $14.1 million ($20.7M)
  13. Meharry Medical College – $14.0 million ($19.0M)
  14. Fayetteville State University – $13.7 million ($14.7M)
  15. Morgan State University – $13.6 million ($15.7M)
  16. Prairie View A&M University – $13.1 million ($12.3M)
  17. South Carolina State University – $12.6 million ($12.7M)
  18. North Carolina Central University – $12.4 million ($11.5M)
  19. Clark Atlanta University – $9.9 million ($9.2M)
  20. Xavier University of LA. – $9.6 million ($9.3M)

TOP 20 COMBINED TOTAL: $425.7 million ($445.4 million)

Additional Notes

The HWCU-HBCU gap for research among top 20 research institutions is 50:1

Top 20 HWCUs Combined: $21.1 billion ($23.2 billion)

Top 20 Average HWCU – $1.1 billion vs. Top 20 Average HBCU – $21.3 million

Top 20 Median HWCUs – $990 million vs. Top 20 Median HBCU – $15.5 million

Source: National Science Foundation

The Forgotten Mission – HBCUs Account For Less Than One Percent Of America’s College Research Spending


A man wearing black pants, a white shirt and black shoes, writing on the wall. He is drawing a line of gears and writing business-related words above and below the gears

“Many think that the principal mission of universities is to transmit knowledge; they miss the key point that teaching and research are inseparable. American universities must continue to discover new kinds of knowledge and new ways of thinking.” – Dr. Eric Kandel

In 1896, Booker T. Washington invited George Washington Carver to head Tuskegee Institute’s Agriculture Department. For almost five decades Carver would set himself in stone as the greatest scientist and research ever to grace the halls of an HBCU. To this day he and his accomplishments are the measuring stick by which all HBCU research and scientists are measured. Yet, the fever by which Tuskegee invested in Carver and his research seems like a distant memory in HBCU lore and strategy.

HBCUs have always been known for promoting their values of community service and teaching, but oft left out of the conversation is the research portion of our institutions. The importance of research can not be overstated. As mentioned in the article The University of Power & Wealth that research and an environment of campus entrepreneurship to commercialize that research has produced companies like FedEx, Microsoft, Google, Facebook, Time Warner, and Dell just to name a few of the more well known companies. Not just companies, but products like Gatorade, which was invented at the University of Florida in 1965 and from which the university still receives royalties north of $10 million annually from Pepsi. There have also been inventions that simply serve the societal good like oral contraceptives and the seat belt that were created by college research and ingenuity.

HBCUs comprise approximately 2.3 percent of all colleges and universities in America. However, they make up only 0.7 percent of the research and development spending by American universities. Just to get to its representative amount of 2.3 percent would require R&D spending to increase from its current $500 million to $1.5 billion. Unfortunately, almost every conversation had with HBCU leadership and alumni would lead many to believe the answer to fixing our financial problems is through sports. A recent report by the NCAA showed that only 14 of the 120 Football Bowl Subdivision schools made money from campus athletics. That profit is primarily thanks to television deals through their conferences that HBCUs have little hope of obtaining at scale. That is not to say they can not be profitable, they can, but not following the playing book of their counterparts. For a more intimate perspective let us look at the University of Texas, the school with the one of the most valuable football programs in the country. It produces $109 million in revenue according to Forbes. Sounds great, right? Sounds like the answer to all of our prayers. Because when you are dehydrated even a bit of spit your way will appear to be a glass of water. Meanwhile, the University of Pittsburgh, America’s top grossing university hospital, produced revenue of $11.87 billion or 109 times the revenue that the University of Texas football program produces annually. In fact, even the University of Texas’s most valuable asset is its hospital, which generates almost $5 billion in revenue annually and has unbridled power in the city of Houston’s Texas Medical Center, the largest of its kind in the world.

Currently, HBCUs as aforementioned produce approximately $500 million collectively in research expenditures annually. There are 40 HWCU/PWI schools that individually do $500 million or greater annually and 8 of those 40 conduct $1 billion or greater annually according to the National Science Foundation. The gap between the top twenty HWCU/PWI and HBCUs when it relates to research continues to grow with the most recent data showing for every $1 that HBCUs spend on research, their counterparts are spending $52.

This is not to say that HBCUs are not doing prominent research, they most certainly are. Dr. Hadiyah-Nicole Green, a physicist, alum of Alabama A&M University, and who was a professor at Tuskegee University and now serves at Morehouse School of Medicine, received a $1.1 million grant for a pioneering technology that can kill cancer cells with lasers. That is just one of many prominent discoveries happening within HBCU research, but there are more fields and much more that needs to be taking place from history, economics, STEM fields, and many more. HBCU research should be touching every facet of African American and African Diaspora life. Yet, the commitment and infrastructure to do so is significantly lacking to close the gap.

We have examples of brand new stadiums that cost an HBCU $60 million, but two-thirds of that cost  was paid for by increasing student fees. Where is the same commitment to research? What would it take to build the first HBCU into a billion dollar research institution?

  1. VISION – This is as abstract as it is tangible. Either alumni or a president needs to commit to research as an integral part of the institution and what their plan would be to grow a strategic plan of making it a larger part of the HBCU’s DNA. One way to go about this is to bring in a president with a research background who truly understands and values both STEM and Humanities research and the possibilities it can open for an institution willing to invest in it. We explored a list of a potential HBCU presidents with at least six of the choices having solid research backgrounds in everything from technology to archaeology. These are the type of people who know what it takes to build the infrastructure and develop a strategy as it relates to building a research juggernaut.
  2. RESEARCH PHILANTHROPY – Also known as targeted giving. We see this when alumni are asked to become boosters. Athletics on most college campuses, HBCUs included, has had more targeted giving than other departments. It works primarily because alumni feel the giving is tangible. Give to athletics and your teams win is the tagline. HBCUs must lay out a similar vision and tagline for research. Alumni need to know why they need to give to research and what exactly it is building – see number one. Virginia State University Economics alumni have taken matters in their own hands created an endowment for their department of which a percentage is directly to be used for economics research. It is vital that alumni know what their donation is going to be used for and how much it will take to accomplish the objective.
  3. ALL HANDS ON DECK – By this we mean that research must be present throughout the entire campus. Who on an HBCU campus should be conducting research? Everyone. Quite literally. Freshmen upon entering should know that in order to graduate they will need to have completed some type of supervised research. More students are taking longer than four years to complete undergraduate these days so they may as well add this component while they are matriculating. It may go a long way to keeping them focused as well. According to Science Magazine it also has become a vital piece of obtaining employment or improving graduate schools, “undergraduates participate in research all the time; in chemistry, 72% of graduates had some research experience, according to a recent study sponsored by the National Science Foundation (NSF). In environmental science, the study found, 74% of undergraduates had research experience.” However, it can not stop with the undergraduates or even the graduates, faculty and staff must be involved. Remember the Gatorade? The groundskeeper department may create the next amazing product that can go from college grounds to residential  homes across the country. Make everyone invested in it.
  4. STOP ACADEMIC INCEST – This is strictly for HBCUs with graduate schools.  Far too many HBCU undergraduates who graduate from HBCUs with graduate schools who do not have a job lined up or still not sure what they want to do just park themselves in the school’s graduate school as a placeholder. For those HBCUs, they do not mind because the student keeps supplying them with tuition revenue for a few more years. This is short sighted and apathetic. If the majority of your graduate school is made up of your own undergraduates you are doing something wrong. Students do not benefit from it because they never get new perspectives. Remember, HBCUs are not a monolith of intellect. Students themselves benefit from a change of scenery and institutional DNA. The same goes for the institutions. An infusion of new intellectual capital, more sharpened, and the cream of other HBCUs alumni raises the research prowess.
  5. THE PIPELINE – Last, but not least – the pipeline. This means that HBCUs must be connected. HBCU must make it a point to push their HBCU undergraduates into HBCU graduate schools (just not their own). If the HBCU is an undergraduate institution, then it must ensure its alumni are choosing HBCU graduate schools if they are considering furthering their education. For instance, Texas Southern and Prairie View A&M, two public HBCUs in Texas, have within their own state six private HBCUs that are undergraduate only. Alumni from both institutions are coming together to create scholarships through the HBCU Endowment Foundation that would provide scholarships from the six private HBCUs to those two HBCU’s graduate schools. A vital means to keeping the cream of the intellectual capital from the pipeline within it. A key example of the pipeline is the aforementioned Dr. Hadiyah Nicole-Green (pictured below) who attended Alabama A&M University for undergraduate and has become a faculty at Tuskegee University and is now at Morehouse School of Medicine.

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These are just a tip of the iceberg that HBCUs must do to improve the research prowess of our institutions from undergraduate to graduate and throughout the campus. Colleges and universities importance in creating and impacting societal, economic, and political research can not be understated of the acute importance it prevails. HBCUs can find long-term financial security in more research and increasing their value to African America and to the world in general. We do not need to produce another George Washington Carver, but an army of Carvers. If we are to be present in the institutional landscape for another century, then we must ensure that research is an important part of our foundational pillars we build upon.

HBCU Money™ Presents: The George W. Carver 2014’s Top 20 HBCU Research Institutions


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In an ode to the greatest HBCU scientist, we have now named our top HBCU research institution list for George Washington Carver.

HBCUs appear to have taken another step back in the research field according to the latest National Science Foundation data. In 2013, research expenditures for the top 20 HBCUs combined for $451.4 million, while 2014 combines for $445.4 million. This represents a 1.34 percent drop year over year and 2.13 percent drop from two years ago.

  • The top ranked HBCU is Florida A&M University at 199 and the twentieth ranked Alcorn State University is listed at 314 in America’s college research landscape.
  • MEAC leads the way with eight schools versus the SWAC with four.
  • Division II/III schools also comprise two schools on the list.
  • Overall, the 1890 HBCUs are fifty percent of the list highlighting agriculture’s importance role in HBCU research.
  1. Florida A&M University – $41.37 million
  2. Morehouse School of Medicine – $41.86 million
  3. Howard University – $40.77 million
  4. North Carolina A&T State University – $35.05 million
  5. Alabama A&M University – $32.91 million
  6. Jackson State University – $$26.61 million
  7. Tuskegee University – $24.95 million
  8. Charles Drew University of Medicine – $20.69 million
  9. University of Virgin Islands – $20.37 million
  10. Tennessee State University – $20.07 million
  11. Meharry Medical College – $19.00 million
  12. Delaware State University – $17.68 million
  13. Morgan State University – $15.72 million
  14. Fayetteville State University – $14.73 million
  15. South Carolina State University – $13.15 million
  16. Prairie View A&M University – $12.29 million
  17. North Carolina Central University – $11.54 million
  18. Hampton University – $11.17 million
  19. Southern University and A&M College – $10.42 million
  20. Alcorn State University – $10.06 million

TOP 20 COMBINED TOTAL: $445.4 million ($451.4 million)

Additional Notes

The HWCU-HBCU gap for research among top 20 research institutions is 52:1, an increase from 2013’s 50:1.

Top 20 HWCUs Combined: $23.2 billion ($22.5 billion)

Top 20 Average HWCU – $1.1 billion vs. Top 20 Average HBCU – $22.3 million

Top 20 Median HWCUs – $948 million vs. Top 20 Median HBCU – $19.5 million

Source: National Science Foundation

HBCU Money’s 2015 Top 10 HBCU Endowments


 

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The keyword for  2015’s HBCU endowments – concerning. Two bellwether HBCU endowments, Spelman College and Hampton University, saw negative declines in their endowment’s market value. Outside of Howard University storming ahead at 11.7 percent, no other HBCU endowment saw double digit gains with North Carolina A&T State University missing the mark by 10 basis points. This is a far cry from 2014’s list when 9 out of 10 reported double digit gains. If there is any solace in the numbers and there is not much, it is that the top ten endowments of our HWCU counterparts had no endowments return double digit gains and also saw 2 out of their 10 with declines in market value.

Although there are some notable absences** from our top ten list, it certainly would not change the reality that still only three HBCUs have endowments above the $200 million mark and none have reached the $1 billion plateau, although Howard University, despite its noted financial issues seems to be headed there unabated and without much competition from Spelman College or Hampton University, the only real challengers. John Wilson, president at Morehouse College, in an interview with Harvard Magazine in 2013 noted, “is the need to build endowments; less than $200 million makes you, by definition, unhealthy.” This still remains the case and as a baseline means that 97 percent of all HBCUs are financially unhealthy. Even more concerning is that there seems to be no real plan in place to address this. A canary in the coal mine though is that donations of $1 million or more to HBCUs jumped from one in 2013 to nine in 2014, but donations of the eight and nine figure variety, also known as transformative donations, are still absent at HBCUs.

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 – $659 639 (11.7%)

2. Spelman College – $362 986 (-1.1%)

3. Hampton University – $263 237 (-8.7%)

4. Meharry Medical College – $139 054 (1.5%)

5. Tennessee State University – $51 416 (1.8%)

6. Texas Southern University – $48 684 (4.5%)

7. Virginia State University – $47 432 (4.9%)

8. North Carolina A&T State University – $48 100 (9.9%)

9. Winston-Salem State University – $37 219 (8.5%)

10. University of the Virgin Islands – $34 274 (-9.0%)

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 FY2013 to FY2014 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, Dillard University, and Florida A&M University. Morehouse College, Tuskegee University, and Dillard University have never reported their endowment to NACUBO in the time HBCU Money has been recording its annual top ten endowments. Florida A&M University who was number five last year did not appear in this year’s list from NACUBO.

Additional Notes:
NACUBO Average Endowment – $648 074 (1.7%)
NACUBO Median Endowment – $115 828 (-0.9%)
Top 10 HWCU Endowments combined – $185.4 billion
Source: National Association of College & University Business Officers