Tag Archives: harvard endowment

Howard v. Harvard: Financial Takeaways From The HBCU-Ivy League Game Of The Century (Or So We Hoped)


This game was building in hype from the moment it was announced. The premier academic higher education institutions that represented the best of European American and the best of African America. Schools known best for their academics who also happen to have strong athletic heritages. Harvard University, founded in 1636, calls Boston, Massachusetts home. Arguably, the “capital” of WASP America. Howard University, founded in 1867, calls Washington, D.C. home and up until a decade ago was affectionately known as “Chocolate City” due to the high concentration of African American population. Today, thanks to gentrification it is starting to look a bit more like “Pumpkin Spice Latte City”, but that is another story all together. The game itself ended up resembling unfortunately the economic state of the two groups they represent and how sometimes no matter the size of the heart of the dog in the fight, the size of the dog actually matters. The final score: Harvard 62 v. Howard 17. HBCU Money decided to do a quick take on the financial reality of these two institutions since there is talk that HBCU-Ivy League games could be a “thing” in the future.

ENDOWMENTS:

Harvard has a 231 year head start and one could make the case even longer if we want to count African America’s struggle to hold onto financial assets from coming under attack through a myriad of issues like stolen land, Jim Crow, violence and the like for 100 years AFTER Howard’s founding. However, the situation is as the situation is. According to NACUBO, Harvard’s endowment at the end of fiscal 2018 stood at $38.3 billion, while Howard’s endowment stands at $688.5 million. That gives Harvard about $55 for every $1 that Howard has.

ALUMNI GIVING RATE:

While there are a lot of factor that tie into alumni giving rates, the fact remains it is one of the more even playing fields that HBCUs and PWIs can compete in head to head. Why? A donation of ANY size counts towards the alumni giving rate. From $1 to $100 million, it counts the same in the alumni giving rate. Harvard ranks second in the Ivy League conference with a giving rate of 33.1 percent according to Yale Daily News. Howard, like many HBCUs alumni giving rate fails to even break double digits with a 7 percent giving rate according to the Washington Post. This area may be more problematic in closing the institutional gap more than almost any other. Harvard’s alumni just by their demographic have more wealth than Howard alumni so to have an alumni giving rate that is 500 percent higher just exacerbates the problem. European Americans have over 10 times the wealth that African Americans have, which means that Harvard alumni are likely giving higher dollar amount donations and clearly at a higher percentage. If Howard and HBCUs are going to close the ground, then they are going to have to have a higher giving rate. HBCUs are not getting major donors, but they can get a lot small donors to give a lot to make up the ground.

RESEARCH EXPENDITURES:

Just as scary as the endowments, the research expenditures that both schools touts an immense institutional gap. Although, a grain of sunshine, Howard does lead all HBCUs in research expenditure, while Harvard ranks ninth among PWIs. That being said, Harvard’s annual research expenditure is 24 times the size of Howard’s. Harvard, ranked ninth nationally in research expenditures, has a 2017 RE of $1.1 billion. Howard, ranked 203rd nationally in research expenditures, has a 2017 RE of $45.8 million. Unfortunately, Harvard’s research expenditures have been trending upward the past few years, while Howard’s have been trending downward.

ATHLETIC BUDGETS:

Both institutions compete in the FCS, formerly known as Division 1-AA, but there have been 41 FCS champions since the formation of the playoff in 1978 and only one HBCU has ever participated in the championship game. Florida A&M University won the FCS championship its inaugural season and no HBCU has been back since. The Ivy League on the other hand is one of three FCS conferences that simply opts out of the playoff all together. In the 1950s, the league itself simply considered sports not even a secondary priority some would say. That being said, Harvard’s athletic budget is still 70 percent larger than Howard’s and larger than virtually every HBCU. Harvard’s $17.6 million makes a world of difference on the football field compared to Howard’s $10.1 million. The Ivy League average on athletics is $27.1 million, while the average in the SWAC/MEAC is $9.7 million. This makes future contest not very exciting too look forward too if this is the margin by which our schools will be competing against.

BILLIONAIRES:

A potentially odd category to finish with, but one clearly relevant. Resources matter in higher education and when Harvard’s endowment is almost 20 times the size of all HBCUs combined, then you have to wonder just how the gap can be closed among HBCUs and PWIs. As of 2018, Harvard has 188 alumni who were billionaires. The most of any college in America. Howard University have none. HBCUs all told have two (Oprah Winfrey and Ann Kroenke).

Howard’s largest donation in school history was $6 million in 1987, which adjusted for inflation is $13.5 million. Harvard’s largest donation seems to be a moving target with billionaire after billionaire competing for the top spot. In comparison, Harvard received a $400 million gift in 2015 from one of its 188 billionaire alumni. No HBCU has ever received a donation of $100 million or more.

 

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HBCU Money’s 2016 Top 10 HBCU Endowments


piggybank

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.

endowment-works-1

*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

America’s 2014 Top 10 College Donations


rongeraldchan

In the world of philanthropy there are two types of donors that development offices love. High-quality donors who give consistently and over their lifetime will probably give six to seven figures of donations. Often these donors leave the bulk of their donation through their estate. The second are transformative donors who can change the paradigm of an entire institution with one donation. These donors are masters of their universe with the wealth and power they wield and often the barons of their particular industry. Donations from transformative donors range from eight to nine figures.

The 2014 top donors definitely saw a pull back from their 2013 giving. Combined donations came in $500 million lighter than last year. However, this year was led by two brothers, Ronald and Gerald Chan (pictured above), who donated $350 million to Harvard’s School of Public Health.  Their donation is equal to 10 percent of Harvard’s endowment, which still is the world’s largest college and university endowment.

ABOUT THE DONATIONS:

Total Giving Combined – $2.0 Billion

Median Donation – $60 Million

Average Donation -$79.4 Million

The combined donations are equal to all HBCU endowments combined.

ABOUT THE DONORS:

Total Net Worth Combined – $42.8 Billion reported

Median Net Worth – $2.2 Billion reported

Average Net Worth – $4.3 Billion reported

This year was extremely geographically diverse with 16 different states being represented. California, New York, and Illinois all tied for three apiece.

1. Morningside Foundation (Gerald & Ronald Chan) – $350 Million
Recipient: Harvard School of Public Health
Source of Wealth: Family wealth, Finance, Investments
Net Worth: $2.4 Billion

2. Kenneth C. Griffin – $150 Million
Recipient: Harvard University
Source of Wealth: Finance
Net Worth: $6.5 Billion

T3. Fred Eshelman – $100 Million
Recipient: University of North Carolina at Chapel Hill, Eshelman School of Pharmacy
Source of Wealth: Health products
Net Worth: N/A

T3. Anonymous – $100 Million
Recipient: Oregon Health & Science University Foundation
Source of Wealth: N/A
Net Worth: N/A

T3. Anonymous – $100 Million
Recipient: Dartmouth College
Source of Wealth: N/A
Net Worth: N/A

T4. David Rockefeller – $75 Million
Recipient: Rockefeller University
Source of Wealth: Family wealth, Finance
Net Worth: $3 Billion

T4. John W. Jordan II – $75 Million
Recipient: University of Notre Dame
Source of Wealth: Finance
Net Worth: N/A

T4. Alfred C. Warrington IV & Judy Warrington – $75 Million
Recipient: University of Florida, Warrington College of Business Administration
Source of Wealth: Industry
Net Worth: N/A

T4. Sandra & Edward Meyer Foundation – $75 Million
Recipient: Weill Medical College of Cornell University
Source of Wealth: Advertising
Net Worth: N/A

5. Jay H. Shidler – $69 Million
Recipient: University of Hawaii Foundation
Source of Wealth: Investments, Real Estate
Net Worth: $700 Million

T6. Charles T. Munger – $65 Million
Recipient: University of California – Santa Barbara
Source of Wealth: Investments
Net Worth: $1.3 Billion

T6. Albert P. Viragh (deceased) – $65 Million
Recipient: John Hopkins Medicine, Sidney Kimmel Comprehensive Cancer Center
Source of Wealth: Finance, Investments
Net Worth: N/A

T7. Vanier Family – $60 Million
Recipient: Kansas State University
Source of Wealth: Agriculture
Net Worth: N/A

T7. Mulva Family Foundation (James & Miriam Mulva) – $60 Million
Recipient: University of Texas at Austin
Source of Wealth: Energy, Oil
Net Worth: N/A

8. Madison and Lila Reetz Self – $58 Million
Recipient: University of Kansas
Source of Wealth: Chemicals, Finance
Net Worth: N/A

9. Kavitark & Vidjealatchoumy Shriram – $57 Million
Recipient: Stanford University
Source of Wealth: Technology
Net Worth: $1.9 Billion

T10. Ronald & Eileen Weiser – $50 Million
Recipient: University of Michigan at Ann Arbor
Source of Wealth: Real estate
Net Worth: N/A

T10. Steve & Connie Ballmer – $50 Million
Recipient: University of Oregon
Source of Wealth: Technology
Net Worth: $20.6 Billion

T10. David & Cheryl Strauss Einhorn – $50 Million
Recipient: Cornell University
Source of Wealth: Finance
Net Worth: $2 Billion

T10. Donald (deceased) & Marilyn Keough – $50 Million
Recipient: University of Notre Dame
Source of Wealth: Food and beverage
Net Worth: N/A

T10. Jimmy Haslam – $50 Million
Recipient: University of Tennessee at Knoxville
Source of Wealth: Family wealth, Retail
Net Worth: $2.8 Billion

T10. Agnes Nelms Haury – $50 Million
Recipient: University of Arizona Foundation
Source of Wealth: Family wealth
Net Worth: N/A

T10. Thomas Kline – $50 Million
Recipient: Drexel University, Thomas R. Kline School of Law
Source of Wealth: Law
Net Worth: N/A

T10. Norm Asbjornson – $50 Million
Recipient: Montana State University
Source of Wealth: Manufacturing
Net Worth: N/A

T10. Gary K. Michelson – $50 Million
Recipient: University of Southern California
Source of Wealth: Health care, Invention
Net Worth: $1.6 Billion