Tag Archives: HBCU

Bun B Advises African America To Get A Larger Worldview When It Comes To Wealth

”Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson

The Walton Family, most notably known as the “owners” or dominant shareholders of Wal-Mart. As of March 31, 2022 they are worth an estimated $234.2 billion or 20 percent of African America’s $1.1 trillion buying power.

In an interview with Brandon Hightower, who is better known as B High and a journalist in Atlanta, on his YouTube channel BHighTV, Bernard Freeman, better known as hip-hop legend Bun B, lays down an immense amount of financial wisdom that he has accumulated over the years. Primarily speaking to up and coming hip-hop artists, the conversation could apply to any room in African America. According to an economic study done by McKinsey, African America continues to be the poorest racial group in America with a median net worth of only $24,000 and yet its financial behavior according to Mr. Freeman reflects anything but that.

Mr. Freeman immediately addresses the issue of ownership versus labor that many may have overlooked in the conversation. Asked about how to navigate the issues of artist feeling like they are being robbed by their labels Freeman says, “Don’t sign to a label. I mean that’s just it. Don’t sign to a label and take the slow road.” When pressed by Hightower of people not wanting to take the slow road, Freeman counters with, “Take the fast and get robbed then. Do you want to be famous or do you want to be rich? Because there is a likeliness that you might not be able to be both in this game. At a certain point you have to decide, do you want to be seen and known and look like you got bread and have everybody assume you got bread? Or do you really want to have bread and have people just assume you broke and not really getting it?” The slow road being an independent label that you own and own the masters and all rights to your music or going with a major label who owns the rights to everything you produce in exchange for a small royalty. Do you want to be the owner or do you want to be the labor? This is a question that is consistently overlooked in our community and institutions. HBCUs love to discuss how many of their students have gotten jobs, but when is the last time you saw an HBCU produce an entrepreneurship report detailing how many of their students started companies, hired other HBCU graduates, brought jobs to their community, wealth creation, and overall economic impact in the community? You do not because we do not have a focus there. Our community too often prides itself on finding a “good” job. Despite this push, our unemployment rate always remains twice the national average. Why? Because there is not nearly enough ownership within the community and therefore the ability to dictate employment, wages, and wealth in our community are always at the hands of others.

After a brief exchange on how the African American community seems to not believe that you can be famous and not be rich and be rich and not be famous, Mr. Freeman ask Mr. Hightower if he knows what the Walton Family (pictured above) looks like to which the latter replies no idea. The irony that members of the Walton family could walk into many Wal-Marts around the country and not be recognized, while controlling one of the world’s largest corporations and being one of the wealthiest families on Earth is not to be lost in this age of social media influencer and the like that more and more see as a path to riches. Again, associating being known with being financially successful. And while a few people listed on the Bloomberg Billionaires’ Index maybe well known, such as Bill Gates, Elon Musk, Mark Zuckerberg, 99 percent of that list could walk into many households and be absolutely unknown. However, one thing they all have in common? 100 percent of them are owners.

Mr. Freeman then says in response to Mr. Hightower asking how do we get kids to see beyond the drug dealers, ballplayers, and rap stars, “You have to give them a broader worldview so they can see what real money look like. Because I tell young people all the time everybody that you looking on TV and on the internet that’s rich, with the exception of a hand full of people, maybe ten people, somebody pay them.” He even goes on to discuss Shaquille O’Neal, who he believes either is close to or already a billionaire, but also states that a large portion of O’Neal’s wealth comes from people paying him, but who they themselves were already billionaires and O’Neal had no idea what they looked like before getting paid by them. We often hear of athlete’s salaries, but rarely if ever think about what the owner’s of these teams make. The NFL for instance, which is one of the worst paying professional sports leagues for players based on salaries and career expectancy, is also the most profitable sports league for owners. It is no coincidence that those two things go hand in hand. As of this article, Deshaun Watson, quarterback for the Cleveland Browns, recently signed to become the highest paid player in NFL history at 5 years, $230 million or $46 million per year. Compare that with Jerry Jones, owner of the Dallas Cowboys, who last year took home $280.4 million or six times what Deshaun Watson’s contract is. Even more so, Jerry Jones does not have to take one hit owning the team, can own it longer than any player can play, and then can pass it onto his children (as of this article the Dallas Cowboys are valued at $6.5 billion according to Forbes). Deshaun Watson can claim none of those things. Again, labor versus ownership.

This is not to say that Mr. Freeman is against having fun and enjoying your money as he points out discussing the trend of people who count money on the internet as a form of showing off. But he also follows it with, “Jay-Z is getting richer and richer and he is wearing less and less s**t that looks rich. And you keep going into these rooms with these people trying to look like money. No, you have to sound like money, think like money.” He points out that you will do little to impress Jeff Bezos or Warren Buffett walking into a meeting with them wearing a $4-5 million watch, number 2 and 5 on Bloomberg’s Billionaire Index and worth a combined $400 billion or 36 percent of African America’s buying power. One could argue that you may even turn them off by spending so lavishly. Spending $5 million on a watch versus leveraging that $5 million into $25 million worth of real estate and $2.5 million in annual income from that real estate looks like someone who is not really interested in building generational wealth. Especially for African America when every single dollar is going to count for families, communities, and institutions. In 2019, African Americans accounted for 13.2 percent of the population, but a heartbreaking 23.8 percent of poverty according to the U.S. Census.

“Wealthy does not have to prove to anybody that they are wealthy”, says Mr. Freeman in closing out the show’s segment. And to that point, the lack of wealth in our community and institutions continues to induce behavior that screams of lack. Unfortunately, wealth is not going to be generated by a job or even by starting a business per se. Wealth and power is generated by the building of an institutional ecosystem that is connected and circulates intellectual, social, economic, and political capital within it. African American banks having enough deposits to lend to an HBCU who wants to build a new research facility. An African American venture capital fund setting up and office at an HBCU to fund the next great idea in renewable energy. An HBCU alumni association putting money into an African American community to help ensure the K-12 system is providing the best education with the latest technology. Then all of those moments working together in unison. That is when we will see wealth and then power become not a scarcity in our community but a norm.

To watch the full interview segment, click below or go to http://www.bhightv.com.

Can NFTs Help HBCUs Close The Endowment Gap?

Black people lived right by the railroad tracks, and the train would shake their houses at night. I would hear it as a boy, and I thought: I’m gonna make a song that sounds like that. – Little Richards

The individual, familial, community, and institutional wealth gaps between African America and all other groups continues to widen. Despite the consequential donations from Mackenzie Scott and Michael Bloomberg in 2020 to HBCUs it is simply not enough consistently and overwhelming enough to put out the fire. That fire being the HWCU-HBCU endowment gap, which is over $100 to $1 – and widening. Ironically, African America is often standing there with a water hose in their hand watching their house burn while waiting on their neighbor to bring a bucket of water over and help. Why do we say African America has the water hose? By HBCU Money estimates, African America’s tuition revenue value to all colleges is worth $60 billion annually – only $6 billion of that goes makes it way to HBCUs. There are 100 plus HBCUs, but only two have institutional banking relationships with African American owned banks. In other words, there are things that if we just looked inwardly there would be substantive change happening. Instead, we continue to wait for the “lottery” of other’s grace to befall upon us. And to that point, one of the greatest financial opportunities of our lifetime maybe falling upon us to use a resource within our institutions – our creativity.

It is no secret that African American creativity drives American culture. African American creativity has and is often exploited to the social and financial benefit of other groups. There maybe no greater example of that than hip-hop (and the music industry in general) where African American musicians created a genre of music that is now global in reach, but very little of it is actually owned by African Americans. Enter, the internet. Enter, NFTs. The internet is not flat nor is it democratized – after all even on the internet all of the mediums like Amazon, Facebook, Alphabet, Twitter, Square, etc. none are owned by African Americans. However, there is an increasing amount of decentralization that seems to be taking root in pockets of the World Wide Web where opportunities can be staked out. For instance, had an HBCU endowment in July 2011 purchased 5,000 bitcoins which at the time were $13.91 for a total of $69,550, then that HBCU today would have a value of $330 million today. To the best of our knowledge, there are no HBCUs holding bitcoin or any other cryptocurrencies in their portfolio. And while there is still plenty of time to add cryptocurrencies to the portfolio, there is also a new opportunity that one could easily argue is the equivalent of buying cryptocurrencies ten years ago. The NFT.

NFTs or non-fungible tokens are “Non-fungible” more or less means that it’s unique and can not be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.”, says Mitchell Clark from The Verge. NFTs also work off the Ethereum blockchain, Ethereum being a cryptocurrency and blockchains are a digital distributed, decentralized, public ledger that exists across a network. So what can be a NFT? Again, Mitchell Clark from The Verge, “NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.” NFTs are already showing their potential. A 14-year old girl made over $1 million from selling 8,000 NFTs according to Business Insider. The most expensive NFT sold to date went for $69 million at Christie’s. An amount that would still be greater than any donation ever given to an HBCU. Now imagine unlocking the creativity that exist on HBCU campuses with students, faculty, and staff.

This could ultimately be a win-win for everyone involved if setup properly. HBCUs can provide the space, hardware, infrastructure, and other support needed while students, faculty, and staff can provide the immense creative capital that we know. Unlocking African America creativity on campuses could quite literally means tens if not hundreds of billions into African American families, communities, and HBCUs. The incentive for HBCUs to invest in this infrastructure is simple. Financially more stable graduates, improved retention rates, potentially higher alumni donor rates, and a new stream of income for endowments.

Students could see themselves earning enough to reduce or eliminate student borrowing costs. An immense hinderance to HBCU graduates creating generational wealth for themselves and their family. This barrier to wealth also is something that it could be argued contributes to poor alumni donor giving at HBCUs. HBCU donations of significance often come from older HBCU alumni who tend to wait and give a large donation either at the end of life or through their estate once they have passed on. HBCU students on a whole as reflecting in HBCU Pell Grant numbers are coming from far more low-income backgrounds their PWI counterparts. Brookings reports that almost 60% of HBCU students expect $0 in family contributions (graph below) to their education as opposed to less than one-third for non-HBCU students. On the other end less than 6 percent of HBCU students expect their family to contribute at least $19,300 to their education versus over 20 percent of non-HBCU students. This means that despite HBCUs on average costing significantly less than their PWI counterparts, HBCU students are still more likely to graduate with student loan debt and significant student loan debt loads. The most recent HBCU Money report showing that 86 percent of HBCU graduates finish with debt and a median of over $34,000 in student loan debt versus 40 percent and $24,000 in student loan debt for those coming from Top 50 endowed colleges and universities.

For HBCUs, the previous mentioned is great for their long-term sustainability, but in this case there is a huge financial reward to be had by HBCU endowments today. By providing the infrastructure, helping ensure the intellectual property rights, and more – HBCUs can create financial partnerships with students, faculty, and staff. This means that in the same way there is NIL (name, image, likeness) happening in collegiate sports, HBCUs too could use these partnerships as a means to recruit more African American faculty who often cringe at the pay rates at HBCUs. It also means that if a student, faculty, or staff produces an NFT for example that sells for $100,000, then potentially on a 50-50 split that the HBCU’s endowment just increased by $50,000. There is also the opportunity to have a foray into the entrepreneurship that is already taking root in the NFT as well as the supporting properties that will support it as an industry and asset class. As we mentioned, intellectual property attorneys in this new age will become even more valuable. There are currently six HBCU law schools who could create a focus on both IP and on digital IP in particular and those schools would be rewarded handsomely by being at the forefront of the curve. Simply put, there is just too much opportunity and money that has yet to even scratch the surface of value for HBCUs to not get involved in NFTs.

The acute importance of closing the endowment gap must be at the forefront of HBCU alumni conversations if our institutions are to be sustained into the next Millenia. It must be if we are to take serious the closing of the individual and institutional wealth gaps for African America. More importantly if HBCUs are to move beyond simply surviving and into empowered institutions that are truly able to serve the social, economic, and political interest of African America and the Diaspora, then having the institutional wealth and endowments necessary to do so is paramount. Climbing this mountain will be no easy task, but we can simply look at the wealth that has been created by our labor and our creativity as an enduring possibility of possibility. This time we must be the ownership of that creativity and protect its ownership at all costs.

Texas Southern University Host NAREB’s Black Homeownership Summit

“We need to intentionally invest in health, in home ownership, in entrepreneurship, in access to democracy, in economic empowerment. If we don’t do these things, we shouldn’t be surprised that racial inequality persists because inequalities compound.” – Pete Buttigieg

On the campus of Texas Southern University on November 4th and 5th, the National Association of Real Estate Brokers, an organization representing the interest of African American real estate professionals, hosted a homeownership summit with focuses on not only homeownership, but also student debt, access to credit, and investing. The importance of such an event being held on an HBCU campus can not be understated.

Intertwining African American institutions with each other has long been a struggle for the community’s development with African American institutions often operating on islands instead of a connected ecosystem. Events like NAREB’s Black Homeownership Summit at Texas Southern University helps highlight the power, potential, and scalability of what happens when African American (and Diaspora) institutions work together. What better place to address Black homeownership after all than on the campus of an HBCU? Soon to be African American graduates and professionals will be at the vanguard of trying to close the acute homeownership crisis that African America continues to face (graph below).

One of the keynote speakers at the NAREB Black Homeownership Summit event was Teresa Bryce Bazemore, CEO and President of the Federal Home Loan Bank of San Francisco, speaking exclusively to HBCU Money about the event said, “We need all the parties in the housing finance industry and other stakeholders to collectively work to eliminate the barriers to homeownership. In this new environment, all consumers including Black and Brown people should be able to participate equally in the dream of homeownership. We need initiatives that can help potential buyers with improving their credit, saving for down payments and understanding the entire home buying process from A to Z. We also need to make sure that the lending rules are equitable.”

HBCU Money’s Suggested Five Initiatives For HBCUs Can/Should Be But Not Limited Too:

  • Making financial literacy a mandatory part of matriculation for HBCU students. This can be done through the financial aid office, workshops, or a class.
  • Providing HBCU students work study jobs that go into the community at African American K-12 schools and teaching financial literacy.
  • Partnering with African American owned banks and credit unions. Due to their deposit bases, many African American owned banks and credit unions simply can not participate in the primary mortgage market and there are few to none African American owned non-bank mortgage lenders. This leaves the African American community in an extremely vulnerable position to predatory lending as has been demonstrated and shown time and time again. HBCUs are a key to growing assets within African American financial institutions through students, alumni, and institutionally.
  • Offering more scholarships for ALL students. Scholarships are purposed to reduce student loan debt, but they are often resigned to high achieving students despite the majority of students being in the middle. This becomes highly problematic for African Americans who usually do not have the familial wealth to assist in paying down or off their student loan debt. HBCUs while cheaper than our PWI counterparts on the whole could be doing even more to reduce the student loan debt burden for African American students by ensuring that any student who is academically eligible has an opportunity to reduce their student loan debt burden. This provides an opportunity upon graduation that more of their initial paycheck is going towards wealth building and potential homeownership rather than debt burden.
  • Encouraging the use of startups like HBCU Real Estate, who has part of their mission statement to use a portion of their profits to provide down payment assistance for HBCU alumni who seek to purchase primary or investment properties.

Homeownership and real estate ownership have long been a cornerstone to establishing generational wealth in the United States. Despite this, the African American homeownership has never crossed over the 50 percent threshold and according to MarketWatch and has always maintained a 20-30 percentage point gap between African and European Americans. African America’s civilian noninsittuional population as of October 2021 was 33.7 million and its civilian labor force is 20.6 million and the African American labor force 20 and over is 19.9 million. Assuming that 44 percent of the 19.9 million are homeowners (8.7 million), it would take approximately 1.5 million more African Americans to become homeowners to get African America above 51 percent. Based on the most recent data provided by Zillow, the typical value of U.S. homes is $308,220 as of September 2021. Between 1999 and 2021, the median price has almost tripled from $111,000 to $308,220. This means in order for those 1.5 million to acquire homes they would need down payments of approximately $16.2 billion using FHA’s 3.5 percent down financing or $10,800 per potential African American homebuyer. While it does not on the surface seem like a lot to many, that number represents almost 45 percent of the African American median net worth, but a mere 6 percent of European American median net worth.

Just for perspective on that $16.2 billion, there are no African Americans with a net worth more than that, but there are 45 Americans whose single net worth exceeds $16.2 billion. The road to achieving more African American homeownership will be no small task, but events like NAREB/Texas Southern will go a long way in us doing the hard work together, lifting the heavy load together, and ultimately achieving our goal together.

$6 Million Donation to University of the Virgin Islands Will Create First Public HBCU Medical School

“The human body experiences a powerful gravitational pull in the direction of hope. That is why the patient’s hopes are the physician’s secret weapon. They are the hidden ingredients in any prescription.” – Norman Cousins

The University of the Virgin Islands simply continues to impress. The HBCU that few people know or talk about as an HBCU keeps its head down and continues the vital work of African Diaspora building. In recent years, UVI has seen a meteoric rise into HBCU Money’s Top Ten HBCU Endowments seemingly out of nowhere. This time the University of the Virgin Islands leads once again showing the constitution of action and strategic planning with the creation of the HBCU Diaspora’s fifth medical school and first ever public medical school. The latter being long overdue.

While it would have been preferable that the medical school bear the name of a historical figure of African descent, Ianthe Blyden or Myrah Keating Smith, two Virgin Islander nurses who were renowned for their healthcare work. Instead, it appears the medical school will retain the name of its financial benefactor, Donald Sussman. Mr. Sussman, according to UVI’s press release, “the founder of Paloma Partners, was a member of the UVI Board of Trustees from 2008 to 2012.”

The public HBCU medical school’s importance can not be overstated. Public institutions represent a way for a group to extract their economic interest from an overall pool of funds that citizens pay into. In other words, Citizen A pays their taxes into an overall pool of taxes, politicians then decide how those funds will be disbursed to the public institutions representing the different interest of the citizenry. The problem that has plagued the interests of African Americans is that we pay into the system, but rarely have public institutions that are able to leverage pulling out funds from the pool to meet our social and economic needs. In this case, that social need is a vast investment in our health outcomes. UVI’s medical school will allow African Americans a significantly more affordable route to the community’s production of medical doctors and health professionals than can currently be offered by private institutions. That is because public institutions, through that tax pool, are able to subsidize the cost of the education they are providing. The lack of a public HBCU medical school has meant that many African American doctors are often forced to go after hospital positions that are well paid and more likely to cater to non-African American patients or medical facilities upon finishing medical school. Community health clinics become out of the question with six-figure student loan debts.

How dire is the situation for African American doctors and health professionals? Asian Americans have 1 doctor for every 117 people in its population, European Americans have 1 doctor for every 457 people in tis population, and African Americans have 1 doctor for every 914 people in its population. Institutionally speaking, there is only one African American owned hospital left as well, run and operated by Howard University.

There is an over 25 percent greater chance if you are African American ages 18-49 that you will not see a doctor because of costs to our white counterparts and a 50 percent chance if you are 50-64 that you will not see a doctor because of cost compared to our white counterparts according to statistics gathered by the American Community Survey from 2014. It is without a doubt that the COVID-19 Pandemic and Recession has probably only exacerbated those statistics. With other factors impacting African American health such as unemployment which means no insurance, poverty, no home ownership, and more, one could argue that African America has been in a health crisis and in order to stop the proverbial “bleeding” then we need to address a severe shortage in doctors and nurses coming from our community. The new medical school at UVI will go a long way in doing just that.

HBCUs medical schools, however, must connect themselves more strongly to HBCU undergraduate pipelines to ensure the best of the best from our institutions remain within our institutional ecosystem. It would not hurt to develop a Pre-K to Medical School strategy either. This means that HBCU alumni from all institutions must support more endowed scholarships at these HBCU medical schools for HBCU undergraduates looking to go to medical school. It also means that we can not rest simply on having one public HBCU medical school. We need others, expeditiously. The building of a global Pan-African health system that is centric to our needs is something we need more of – again, expeditiously. The creation of HBCU medical schools will go a long way into the formation of doing our part in accomplishing that. Let us hope it is not another 55 years before the next one is created, but for now let us celebrate and support the wonderful accomplishment of our brothers and sisters at University of the Virgin Islands.

Internet Services Startup Launched By Three HBCUpreneurs – Who Have Never Met

“Great things in business are never done by one person. They’re done by a team of people.” – Steve Jobs

It is a business story worthy of Hollywood. Mainly because it seems to be a storyline that you only find in movies. However, the story is very real and very powerful. Not only because of its potential, but also because of the possibilities that it presents. Three HBCUpreneurs from three different HBCUs start a business, but have never actually met each other in person. The power of the internet, the power of Twitter and most importantly, the power of the HBCU community.

The company, HBCU Real Estate, is an internet services company that seeks to help the HBCU community (but not limited too) find and use HBCU real estate service providers. Everything from real estate agents, mortgage brokers, interior designers, and more. The founders hope that it will even lead to business creation in the spaces of real estate that the HBCU community may have little to no presence. HBCU Money is aware of only one title company* owned by an HBCU alumnus. HBCU Real Estate’s mission is to help facilitate circulation of the HBCU community’s dollars and keep them in the HBCU community. If successful, it could potentially keep tens of billions of dollars within the HBCU community. The fact that none of the founders have ever met in person makes what they are trying to accomplish even more astounding.

For two years it sat on the proverbial shelf according to organizer, cofounder, and HBCU Real Estate’s Director of Product Development, William A. Foster, IV, a Livingstone College, Virginia State University, and Prairie View A&M University alumnus. “I am a multipreneur and have learned that more hands and brains on deck is almost always a good thing. I needed to meet and find the right people who could understand, compliment, add value, and who could see the potential just as much as I could. Also, I promised myself no more solo projects. When you are involved in as many businesses and organizations as I am, being able to spread the load is vital to success – and sanity.”

Enter Christen Turner, Spelman College and Southern University alumnus, and Marcus King, an alumnus of Prairie View A&M University, both HBCUpreneurs themselves. Ms. Turner, HBCU Real Estate’s Chief Technology Officer, also owns Janelle T. Designs, a graphic designs firm, as well as Forever Femme, an accessories company. Mr. King, HBCU Real Estate’s Chief Marketing Officer, owns Hardly Home, a clothing line that is catered towards travel that was featured on HBCU Money’s The HBCUpreneur Corner in 2015. What does it say to you (King) about the potential of collaboration for HBCUpreneurs that 5 different HBCUs are represented among the 3 cofounders? King answered, “The motto at my alma maters is that “PV produces productive people” and I think that can be said about HBCUs across the board. For years HBCUs have been producing top talent and should continue to do so as we seek to move forward and provide solutions to the problems our community faces.”

The three have followed each other on Twitter for years, although no one can remember for how long. It was towards the end of 2020 that Foster said he approached Turner and King about doing a collaboration or tweeted at them rather. “I sent out a tweet and tagged both of them saying that I need to cofound something with the two of them. Having watched them over the years I knew we would click and have the same kind of work ethic. I just needed to find out if they thought the idea had any legs. If it was not this, it was going to be something else.” The work ethic was confirmed when he said he got an email from Turner on Thanksgiving while he himself was working. Turner further drove the point home of the potential of the moment, “This business will be successful because of two reasons, respect and trust. Despite not having met in an ‘official’ capacity, our partnership seems to have a natural fit to it; almost like pieces of a puzzle. With William’s intuition, he was able to unknowingly add the right people to his team who would each be able to add something different. Whether from a professional standpoint or specific personality traits, we all came in with an immediate respect for each other’s talents and skills. This is why the business will be successful. There’s no questioning; there’s only action, openness, and honesty.” Usually in Hollywood the movie ends with and they lived happily ever after – The End, but in this case it is clear that this is just The Beginning.

For more information, visit http://www.hbcurealestate.com