Tag Archives: hbcu philanthropy

12 Things Your HBCU Alumni Association/Chapter Needs To Do To Be Financially Successful


“Planning is bringing the future into the present so that you can do something about it now.” – Alan Lakein

Far too many HBCU Alumni Associations and Chapters have been asleep at the wheel for far too long financially. They have conducted themselves like a child who says they want to start a lemonade stand, but refuses to take the time to make a plan of acquiring lemons, sugar, water, and certainly not building a lemonade stand. There is more time spent playing with their friends and then seemingly complaining that their friends do not support their lemonade stand – that does not exist. It is enough to drive one mad. We have laid out twelve steps that HBCU alumni associations and chapters need to do to make themselves financially integral and sustainable for the future to meet the financial needs of both African America and the HBCUs they serve.

  1. Move banking accounts to African American owned banks and/or credit unions. It is utterly baffling that HBCUs and HBCU Alumni Associations/Chapters at this point still have not done this very elementary point of economic development given the acute presence of the #BankBlack movement over the past few years. Public HBCUs have more red tape by being state institutions and there are significant political dynamics at play there, but private HBCUs and HBCU alumni associations/chapters at private or public HBCUs at this point simply have no excuse.
  2. Invest in technology, especially financial technology. If HBCU Alumni Associations/Chapters want younger alumni involvement as they claim then they have to come into the 21st century – do you realize we are two decades into the 21st century and some HBCU foundations, alumni associations/chapters do not have a functioning web presence. This is where typically you would insert a mind blown emoji or gif. It is unfathomable and inexcusable at this point. HBCU Alumni Associations/Chapters need a web and social media presence independent of the mother institution for a myriad of reasons that should be readily apparent without great explanation. Alumni associations/chapters can work out an agreement with their schools to create work study that involves social media work and web development for those students who are interested and have the necessary skillset. Otherwise, spend the money and pay for a real web designer and social media manager – it is worth it. Financial technology – accepting payment by Venmo, CashApp, etc. should not be groundbreaking it should be standard. There are a plethora of financial technology available for nonprofit organizations. This should be the job of the treasurer at both the national and chapter levels to find technology that can improve the financial efficiency.
  3. Collect information on your members. Know your association/chapters strengths and weaknesses. If you plan on doing education outreach with your alumni association/chapter, it may help knowing who in the organization that has a background and connections in education. Need to put on an event? It may help to know the alumnus who worked in event planning or knows someone who does. Other information should be household income, level of education, home ownership, etc. The more information the better (we will explain the value of this in another point). But not knowing what assets you have is a dearth of proper planning and strategy.
  4. Write a business plan. If you do not know where you are going, any road will get you there. This opaque behavior is stressfully true with HBCU Alumni Associations/Chapters. We have an alumni association/chapter, now what? Having a written plan of what you want to accomplish, why, and how is paramount to any organization. HBCU Alumni Associations/Chapters are no different. The business plan should be reviewed and updated every 3-4 years to ensure that goals are on track . A review committee made up of internal and external members would be advised.
  5. Create a revenue and investment committee. These can be one committee or two committees, but it needs to exist. Beyond dues, how does the association/chapter plan to make money? Thinking of ways that revenue can be generated and those ideas presented to the association and chapter would be vital. Seriously, because have we not killed the annual golf tournament? Someone on this committee needs to have an investment background and if there is no one in the chapter with it, then invite a local financial adviser to sit on the committee in a volunteer role to help.
  6. Raise dues. There was just a collective gasp from everyone just now. However, creativity. Right now, most associations/chapters charge annual dues of $25-35 annually. Going to a monthly model of $5-10 can skyrocket annual dues revenue to $60-120 which is an increase of over 100 percent in dues revenue and it is an amount that few will miss. Implementing financial technology can allow this to be automated around alumni pay periods.
  7. Produce a newsletter and sale local advertising. Remember the roster of your membership and the data we talked about collecting. This is extremely valuable in putting together a media kit that you can use to sell local advertising in. Most alumni associations/chapters send out newsletters anyway. The ability to monetize that in the most optimal way requires being able to tell potential advertisers who they are reaching. Imagine being able to simply sell ten advertisements a year with twelve month commitments that each pay $50 per month. This is $6,000 in new annual revenue for the chapter from local businesses and relationship building.
  8. Hire a financial adviser. It can be the aforementioned one or a different one, but this also needs to be done. Associations/Chapters should be generating far more income than they do with the collective financial ability at their disposal. As an entity, your association/chapter can have a brokerage account that invest in stocks and bonds – not just sitting in a checking and savings account losing purchasing power. Ensure that the financial adviser is credible. There are even African American brokerage firms that can provide accounts and advising all under one roof. Again, we are not going to fundraise our way to institutional wealth. Our organizations’ money needs to be making money while it “sleeps” because money never sleeps.
  9. Purchase real estate. Now that you have a financial adviser, your chapter should also retain a real estate adviser to help build a rental property portfolio. Remember, we just created $6,000 in new annual revenue via the newsletter. You also raised dues from $25 to $60 and with the $35 surplus on a chapter of just twenty alumni that provides and extra $700 annually. In line with your investment income from your brokerage is also rental income. The association/chapter can focus on purchasing everything from single-family to commercial properties. If chapters purchased near their HBCU, it could help stem off any potential gentrification as many HBCUs are seeing, but in little position to do anything about. They could also purchase real estate locally where their chapter is located. This would provide the association/chapter another stream of revenue and diversified real estate holdings.
  10. Invest in African American small businesses. This could be done in conjunction with African American owned banks/credit unions. If a small business could not qualify for a SBA loan, then the chapter could work out a deal with the bank that would allow them to review the investment on the bank’s recommendation. The chapter would then either invest in the business with equity or provide a loan and act as a shadow lender. We know this is something desperately needed for many African American small businesses who are trying to grow and for some reason or another lack access to traditional financial products. Imagine a local African American kid comes to the bank with the next great social media company, but he needs $38,000 to get it going and does not qualify, but the bank says they have a program that may work to help him. The chapter invest the $38,000 for a 50 percent stake and acts as a passive investor while the kid builds his dream. Why $38,000? This is the amount Mark Zuckerberg and classmate Eduardo Saverin invested to get Facebook off the ground in 2004. A company now worth $840 billion and a 50 percent stake would be worth $420 billion – from a $38,000 investment. Not to mention the potential to secure jobs and internships for your HBCU’s students and alumni as the company grew.
  11. Endow internships at local organizations. HBCU alumni constantly complain about our students not having access to opportunity. Well, now with your new found financial wealth you can buy them access just like everyone else does for their community. The Museum of Natural Science in New York, Miami, Houston, etc. sure do appreciate that $100,000 donation your association/chapter gave them to hire a paid summer internship. The condition? That intern needs to come from your HBCU. Now, a student from your HBCU gets a paid summer internship, work experience in a field of their interest, and most importantly builds their professional network.
  12. Be transparent. Associations and chapters need to ensure that members feel like they know and understand what is going on. Part of this is improving the membership’s financial aptitude through financial literacy so that they understand the decisions being made on some level. Have a quarterly review of the financial portfolio and an annual audit. Trust is vital and for African American organizations that trust is built through transparency.

HBCU Alumni Associations & Chapters should be the symbol of group economics for African America. Instead, the actions have been more hat in hand with the rest of African American organizations who could, but do not leverage their capability. The infrastructure is there for HBCU Alumni Associations & Chapters to be financial forces if the proper financial strategy and plan is implemented. It is time to stop playing and start planning, there is a lemonade stand to build.

HBCU Medical Schools Lead Gifts Of $1 Million Or More To HBCUs in 2015


If you have something to give, give it now. – Mark Bezos

020214 hank aaron CC1

After only one donation of $1 million or more to HBCU in s 2013, in 2014 HBCUs landed an astounding nine, but the upward trend was not to continue. In 2015, HBCUs landed just four of the 530 donations that were of $1 million or more that found there way to American colleges and universities. That equates to 0.75 percent, while HBCUs constitute approximately three percent of the country’s higher education institutions. The nine donations in 2014 were a combined $20.5 million, while 2015’s foursome combined for $7 million.

Leading this year’s donors was Hammerin’ Hank Aaron with a donation of $3 million to the Morehouse School of Medicine. The baseball legend’s donation according to the press release by the school, “will be used to expand the Hugh Gloster Medical Education building and create the Billye Suber Aaron Student Pavilion.” However, the wealthiest donor among the group was billionaire Bill Gross, co-founder of the PIMCO investment firm with $1.5 trillion in assets under management, and his wife. Their donation was second among the group with a $2 million gift to Charles Drew University of Medicine & Science. HBCU medical schools are leaders within the HBCU research community constituting three of the top ten HBCU research institutions. These donations should only strengthen that resolve.

With African American owned banks seeing a huge engagement in 2016, it is possible that this may translate to institutional investments for HBCUs if the seeds of current sentiment are nurtured by leadership. This is an opportunity that HBCUs simply can not afford to miss, both financially and socially. Especially considering the higher education arms race for donors and the top four HWCU/PWI donations totaling $950 million in 2015. Building relationships with African American athletes and entertainers as donors as well as looking abroad in the African Diaspora would greatly increase the possibility of landing more of the eight and nine figure donations that are desperately needed.

The growth in the number of $1 million or more donations is a positive if it continues, but the amounts as well need to see dramatic increases as well for us to make sure our institutions are viable for generations to come.

1. Hank Aaron – $3 Million
Recipient: Morehouse School of Medicine
Source of Wealth: Transportation

2. William H. & Sue Gross – $2 Million
Recipient: Charles Drew University of Medicine & Science
Source of Wealth: Finance, Investments

3. Charles Barkley – $1 Million                                                                     Recipient: Morehouse College
Source of Wealth: Entertainment

4. Jimmie Edwards – $1 Million                                                                          Recipient: Dillard University
Source of Wealth: Chemicals

Source: The Center for Philanthropy

Nine Donations Of $1 Million Or More Find Their Way To HBCUs in 2014


Trammell_CrowPhoto

Never respect men merely for their riches, but rather for their philanthropy; we do not value the sun for its height, but for its use. – Gamaliel Bailey

There was thankfully almost no where to go but up after The Center for Philanthropy’s 2013 database reported HBCUs garnered only one $1 million or more donation out of the 559 to colleges and universities. However, with overall $1 million or more donations in 2014 to colleges and universities down 7.5 percent there was not much expectation that HBCUs would see a substantial increase from the previous year. Yet, a substantial increase there was as nine donations of $1 million or more found their way into HBCU hands out of the 517 to colleges and universities in 2014. This represents an increase from 0.2 percent to 1.7 percent of the overall donations year over year.

It is not all glitter and gold though. The gap between the top donations to HBCUs vs. HWCUs highlights both the institutional and household wealth gap that persist in this country. Combined, the nine donations totaled an impressive $20.5 million for HBCUs. Unfortunately if you take the top nine to HWCUs that number is $1.2 billion or 56 times greater. The gap between the largest donations is even bigger. Harvard University received a $350 million gift, while Paul Quinn College received a $4.4 million gift or an amount almost 80 times less. Transformative donors who can change the paradigm of an entire institution with one donation are much harder to come by for HBCUs. Transformative donations can be different amounts for different size institutions, but the definition lends itself to a minimum of $50 million and above for HBCUs. A figure that would double the bottom half of the top ten HBCU endowments and move the needle double digits on the upper half of the top ten HBCU endowments.

So what is holding back these transformative donations to HBCUs? A myriad of factors. Most transformative donors are titans of industry throughout America and the world. Their ownership in corporations and investments lends them the wealth to do such. African America’s disproportionate labor presence in the public sector where incomes are limited, lack of entrepreneurship, and lack of overall investment in our own institutions often aborts the ability for capital to circulate in African America. However, as more HBCUs are creating entrepreneurship centers on their campuses this could prove in the long-term a positive shift. In the short term, there has to be more emphasis on securing donations from the likes of African American celebrities willing to both give seven figure donations and lend their public capital to the institutions in the way of attracting more donors. That is if HBCUs can throw off their issues of being donor image conscious.

The growth in the number of $1 million or more donations is a positive if it continues, but the amounts as well need to see dramatic increases as well for us to make sure our institutions are viable for generations to come.

1. Trammell S. Crow – $4.4 Million
Recipient: Paul Quinn College
Source of Wealth: Family wealth, Real estate

2. Alfred C. Liggins – $4 Million
Recipient: Howard University
Source of Wealth: Media and entertainment

3. Ada Cecilia Collins Anderson – $3 Million                                                  Recipient: Huston-Tillotson University
Source of Wealth: Insurance, Real estate

4. Anonymous – $2.1 Million                                                                          Recipient: Virginia Union University
Source of Wealth: N/A

5. Anonymous – $2 Million                                                                             Recipient: Stillman College
Source of Wealth: N/A

6. Steve and Anne Pajcic – $2 Million                                                        Recipient: Edward Waters College University
Source of Wealth: Law

7. Nicholas Perkins – $1 Million                                                                    Recipient: Fayetteville State University
Source of Wealth: Food and beverage

8. Josh Smith – $1 Million                                                                                Recipient: Central State University
Source of Wealth: Consulting

9. William R. & Norma B. Harvey – $1 Million                                                  Recipient: Talladega College
Source of Wealth: Education, Manufacturing

Source: The Center for Philanthropy