“Note: These data are based on colleges, universities, affiliated foundations, and related nonprofit organizations that volunteered to participate in NACUBO’s endowment study series.” – NACUBO
Howard University has finally done it. They have become the first HBCU to cross the $1 billion endowment mark. An indelible mark that is now the benchmark for potential to survive the coming admissions cliff that U.S. colleges and universities will face as demographics have acutely shifted from the number of students going to college and the number of colleges who will be able to withstand a downturn. HBCUs (like many smaller colleges and universities) are disproportionately reliant on tuition revenues and government funding to keep the doors open and lights on. The factors are a myriad from low African American wealth to limited investment models for their endowments. The latter being something of a chicken and egg situation whereby when you have less you are more conservative with your investment strategy, but this also leads to minimal returns. Without heavy alumni giving to ensure consistent endowment capital it is hard for HBCUs to take more investment risk.
The PWI-HBCU NACUBO Top 10 Endowment Gap for 2024 stands at $129.2 to $1, which is an increase from 2023’s $128.7 to $1.*
HIGHLIGHTS:
Top 10 HBCU Endowment Total – $2.6 billion*
Top 10 PWI Endowment Total – $336.0 billion
Number of PWIs Above $2 billion – 78
Number of PWIs Above $1 billion – 148
Number of HBCUs Above $1 billion – 1
Number of HBCUs Above $100 million – 8
669 colleges, universities, and education-related foundations completed NACUBO’s FY24 survey and those institutions hold $884.3 billion of endowment assets with an average endowment of $1.3 billion and median endowment of $244.4 million.
HBCUs comprised 1.5 percent of NACUBO’s reporting institutions and 0.3 percent of the reporting endowment assets.
PWI endowments (30) with endowments over $5 billion hold 58.5 percent of the $884.3 billion in endowment assets.
All values are in millions ($000)**
Previous year in parentheses for Endowment Value Per Full-Time Student
**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 FY23 to FY24 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.
SOURCE: NACUBO
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.
“Note: These data are based on colleges, universities, affiliated foundations, and related nonprofit organizations that volunteered to participate in NACUBO’s endowment study series.” – NACUBO
With a looming enrollment crisis for all America’s colleges and universities, we are at a time where endowments are not only going to matter more they are going to matter the most. The building of endowments, cutting of some overweight athletic expenses that allow you to invest more, aggressive fundraising efforts, joint investing with other HBCUs, everything should be on the table. This is an arms race for survival. We have been at alert level red for awhile but apparently the sound of the siren has been broken. Now it is fixed and it is blaring. HBCU endowments are a key and integral component to African American wealth building both individually and institutionally. Their importance to African America’s economic survivability, sustainability, and empowerment cannot be overstated enough. That HBCU endowments continue to be that is a matter of conversation about who at HBCUs should be benefitting and prioritized most by our endowments.
HBCU endowment analysis from 2023 will not reflect that Spelman College kicked off 2024 with HBCUs largest ever donation and the first ever nine figure donation with its $100 million donation from Ronda Stryker and William Johnston. We will see how much of the $100 million makes it into Spelman’s actual endowment coffers this time next year, but even without it Spelman leads all HBCUs in NACUBO’s new category of endowment value per full-time equivalent (FTE) student with $197,713 per Spelmanite versus Florida A&M University’s worrisome $6,044 endowment value per full-time equivalent student. This arguably is a more accurate of how healthy a college or university’s endowment is performing to some degree which we covered in ‘Without Hyperactive Alumni, HBCUs Will Bear The Brunt Of The Building Tsunami Of College Closures And The End Of Their Blackness’. Only Spelman College and Meharry Medical College have endowment value per FTE above $100,000. The national average is $174,499 among all college and universities and median is $47,287. HBCUs reporting have an average of $63,861 and median of $19,256.
On the good news from 2023 is Morgan State University and Virginia State University breaking into the $100 million endowment club as only the ninth and tenth HBCUs to do so. It is assumed that Tuskegee University (not reported) based on their FY 2018 Fact Book also has an endowment above $100 million. This means that roughly 10 percent of the remaining HBCUs have endowments above $100 million. Unfortunately, the gap between that group and those below is staggering with there being questions of a larger percentage of HBCUs potentially having no endowment as a possibility. Lastly, unless Spelman comes through with another jaw-dropping donation (it is certainly possible), then at some point in 2024 Howard University’s endowment will cross the $1 billion mark making it the first HBCU to do so.
The PWI-HBCU NACUBO Top 10 Endowment Gap for 2023 stands at $128.7 to $1, which is an increase from 2022’s $127.5 to $1.*
HIGHLIGHTS:
Top 10 HBCU Endowment Total – $2.2 billion
Top 10 PWI Endowment Total – $321.6 billion
Number of PWIs Above $2 billion – 74
Number of PWIs Above $1 billion – 139
Number of HBCUs Above $1 billion – 0
Number of HBCUs Above $100 million – 9
688 colleges, universities, and education-related foundations completed NACUBO’s FY23 survey and those institutions hold $839 billion of endowment assets with an average endowment of $1.2 billion and median endowment of $209.1 million.
HBCUs comprised 1.4 percent of NACUBO’s reporting institutions and 0.3 percent of the reporting endowment assets.
PWI endowments (30) with endowments over $5 billion hold 58 percent of the $839 billion in endowment assets.
*Due to Hampton University and Morehouse College not participating this year significantly altered the Top 10 HBCUs endowment combined total. Therefore, HBCU Money took the editorial liberty of calculating the PWI-HBCU endowment gap based on 2022’s HBCU endowment total of $2.5 billion.
**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 FY21 to FY22 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.
SOURCE: NACUBO
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.
“95 percent of colleges are tuition driven.” – Robert Franek, The Princeton Review
HBCU alumni and their alumni associations need to demand immediately to see the financials of their HBCU – this is of course assuming their alumni associations house is in order but that is another article for another day. At public HBCUs this is bit easier because of them being a state institution, but private and especially religious-based private HBCUs that effort can prove to be a lot more complicated. However, you do not need to wait until you see fire to call the fire department if you already smell smoke. The fire is there you just cannot see it yet. This is the harsh reality for America’s college business model and this should be the terrifying reality for HBCUs. Far too many colleges in America have unsustainable businesses models and nothing highlights how glaringly broken the model is like their acute reliance on tuition revenue and paltry or nonexistent endowment revenue.
How did we get here? For HBCUs this issue started at desegregation when well over 90 percent of college bound African Americans would matriculate through HBCUs. The Civil Rights Movement fundamentally changed that and struck a death by a thousand cuts to not only HBCUs, but African American owned and operated institutions in general over the past 50 years. We all know the saying about “their ice is colder” so and so forth. African American neighborhoods slowly collapsed, African American owned and operated hospitals have gone from 500 to 1, African American owned banks were at over 50 just 25 years ago now are at 16 – and falling, African American boarding schools once a mighty 100 now only have 4 remaining. HBCUs have not been spared either with the closures of St. Paul’s College, Knoxville College, Bishop College, and Lewis College of Business being the most recent closures over the past thirty plus years.
The reality of what started then for HBCUs saw its fuse lit for PWIs in 2008 amidst the Great Recession when the world economy and capitalism as we know it almost collapsed. As most of African America/HBCUs know, when European America/PWIs catch cold, we catch pneumonia, COVID, Spanish Flu, all while having no insurance or African American doctors. The Great Recession’s effects were many, but perhaps its greatest impact is that many families moving forward simply have chosen to opt out of having children. In the years following, America’s peak high school graduation class is set to graduate in 2025 (see chart below) and forecast of graduating classes thereafter begins a precipitous decline. This poses an extremely bleak outlook for African America whose 2024-2025 and 2025-2026 classes are nominally equal to the African American graduating classes of 2009-2010 and 2010-2011 where in all four graduation years the number of graduates was north of 470,000. The stark difference is that it has taken 15 years to recover to that nominal number all while the percentage of African Americans graduating peaked in 2009-2010 and 2010-2011 when African American high school graduates accounted for 15 percent of American high school graduates. Since 2010-2011, percentages have been declining and will struggle to reach 14 percent of American high school graduates in 2024-2025 and 2025-2026.
In contrast, the two groups who are seeing the most precipitous increase are Hispanic America and Asian America, both who by 2025-2026 will have seen their percentages increase for 27 years without interruption. It poses the question and conversation of whether or not HBCUs can remain predominantly African American for another day, but that day is sooner than later especially given that HBCUs only get roughly 10-12 percent of the college bound African Americans that graduate from high school. USA Today reports, “Yet while 67% of white high school graduates went directly to college in 2020, the most recent year for which the figure is available, 54% of Black high school graduates did, the National Center for Education Statistics reports. That’s down from 66% in 2010.” Needless to say African American education from Early Childhood Education through Graduate School simply does not appear to be trending in any positive direction. Taking 54 percent of approximately 470,000 leaves us with around 254,000 college bound African Americans for HBCUs and based on the 10-12 percent we recruit it means that only 25,000 are likely to find their way to the 100 HBCUs or 2,500 per school. The math as they say is not going to math if this holds true, especially given the reliance on tuition revenue.
According to Appily, “In the United States alone, there are more than 6,500 postsecondary Title IV institutions. Of these institutions, 2,189 of them are Title IV non-degree-granting. The rest are degree-granting, with 1,485 being 2-year colleges and 2,828 being 4-year colleges.” Our number to focus on is the latter number of 2,828 4-year colleges. Of that 2,828 we know approximately 100 are HBCUs or 3 percent. Appily also states that there are approximately 1,626 public degree-granting universities and 1,202 private degree-granting colleges. That means that overall, almost 58 percent of American colleges are public and 42 percent are private. For HBCUs, it is essentially a 50/50 split down the line when it comes to public/private. From a geographic standpoint, 331 4-year colleges are located in the Mid-Atlantic, 495 4-year colleges in the Northeast, and 457 4-year colleges in the Midwest according to CollegeSimply. This accounts for 45 percent of the 4-year colleges in the entire country. On the contrary, HBCUs are highly concentrated in the Southeastern part of the United States which is something of a doubled edged sword. Birth rates in the aforementioned PWI geographic strongholds post-Great Recession are where the highest concentration of concern are so this is a plus, but HBCUs while not predominantly located in those areas are located in predominantly in the Southeast where high school gradation rates are the lowest among all regions in the country and where the states with the highest poverty rates are concentrated. So while the population demographics may not be an issue the ability to afford college most certainly will be and with HBCU endowments being what they are that will be even more magnified. The real question then becomes who is most at risk.
It would be far too elementary to say that simply having a large endowment is an indicator, but as a starting point let us see where that takes us. NACUBO’s 2022 Endowment Study reports 136 public/private colleges/universities in America with endowments over $1 billion – there are no HBCUs. We could even go a step further and look at endowment value per full-time student (see below) gives us a bit more insight. It shows that a university such as Princeton for instance that cost around $85,000 per year to attend that the university would need an endowment of $1.7 million per student to allow a student to attend for free. As we see, Princeton’s endowment value per full-time student is almost $4.1 million which far exceeds the coverage needed. Spelman College is the leading HBCU in endowment value per full-time student at $218,792 (see below) but based on their almost $50,000 per year cost of attendance it needs approximately $1 million per student to allow a student to attend for free. So we see the stark difference in endowment coverage for its full-time students between Princeton and Spelman, the leading PWI and HBCU, respectively.
It is also worth noting the drop between Princeton and Harvard is a 51 percent drop while Spelman to Howard is over 65 percent highlighting just how scarce the resources per student even within the top HBCUs versus their PWI counterparts. This is vital to note because endowments fund far more than student scholarships. They fund professor salaries, research, utilities, and so much more. Endowments returns are also rarely fully available to the operations side of the university to use. Most universities, especially the larger endowments, reinvest a significant amount of their endowment returns back into the endowment. A controversial practice for many who feel like multibillion dollar endowments should be used to battle the college inflation cost. That though requires an institution to have a multibillion endowment to argue about. Again, no HBCU has even $1 billion let alone multiple.
Like most African American individual and household statistics the outlook and trendlines look bleak, but most of us do not know or interested in what the data says. African American institutional outlooks and trendlines are not immune and given institutions weight on individual and household outcomes their trendlines tend to be the vanguard or foreshadow of the future. However, all hope is not lost. HBCU alumni and alumni associations must realize this is an emergency. It was an emergency yesterday, it was an emergency ten years ago, and it was an emergency fifty years ago the moment the seed of desegregation was planted. Waiting on the benevolence of ‘The Double-Edged Sword of White Philanthropy’ is not a sustainable answer or strategically sound. The question now is what is the strategy and possibility ahead.
HBCUs and their proxies lack targeted and developed pipelines that A) are improving the K-12 outcomes of African American students B) ensuring that those that do graduate are coming to HBCUs. For HBCUs that still care about being dominant African American institutions there is a roadmap they can follow. The directory from Black Minds Matter list 461 African American owned schools that span K-12 that provide at the very least a starting pool to develop. This means HBCU alumni must invest to ensure that these schools thrive and that students ultimately find their way in a pipeline that ends in both HBCU undergraduate and HBCU graduate schools. Donating to these K-12 African American schools has a myriad of echo effects: more HBCU teachers hired, develop the curriculums and institutional learning of tomorrow that prioritizes attending HBCUs, purchase supplemental equipment like new technology, ensuring our children are properly nourished, and more. All of this investment and engagement should ultimately lead to moving the African American selection of HBCUs above and beyond the paltry 10 percent we now have of African American bound college students and perhaps can reignite the high school graduation rates.
The other conversation we need to have, albeit a very uncomfortable one is HBCU mergers, creation of HBCU systems, and new institutional formations that may allow us to be more financially sustainable. For instance, Fisk and Meharry are quite literally across the street from each other. Public HBCUs in each state merging underneath a joint system while the campuses remain separate. Or at the very least creating shared foundations, i.e. The (insert state) HBCU Investment Foundation that would manage the endowments and institutional development of all the HBCUs in that state collectively. For once we have to be aggressively proactive and not wait until crisis is upon us and be our usual reactive. Far too many of our HBCUs simply will not survive and those that do will be left on islands and in a collectively weaker state to battle external forces that we know would prefer African American institutions go away all together.
In order for HBCUs to survive for another century enrollment has to start trending upward and hyperbolically. We must also make some hard choices about what we are choosing to spend our limited institutional money on. Should our athletics move down a division to save millions? Probably, especially if that money can be used to strengthen our endowments, reduce student loan debt so our graduates can build wealth faster, and invest in the K-12 pipeline. This and many more hard conversations need to be debated and discussed among HBCU alumni immediately. We are late, but we are not too late. Decisive actions need to be taken to put far more of our schools on sound financial footing and increase the pipeline of students coming in and the endowment value per full-time student. Otherwise, we maybe seeing a lot of HBCUs being read their last rites.
Guilt: the gift that keeps on giving. – Erma Bombeck
The year of George Floyd’s death and the European American guilt that accompanied it can be argued was the catalyst that led to the largest flurry of million dollar plus donations to HBCUs ever seen and it was led almost solely by one woman – MacKenzie Scott, the quietly known co-founder of Amazon who has emerged as a powerhouse in the world of philanthropy. Of the reported 37 donations of $1 million or more as reported by the Chronicle of Philanthropy to HBCUs, Ms. Scott is responsible for 22 of them. Her donation to Prairie View A&M University was the largest in the school’s history and the largest ever to a public HBCU. Questions of where the money actually ends up and who is managing it given Prairie View’s relationship to Texas A&M are worth investigation by PVAMU alumni. All the same, HBCU endowments began 2020 standing at approximately $2.1 billion combined. 2020’s million dollar plus donations to HBCUs are equivalent to roughly 33 percent of that – in one year. To put in perspective, these donations to HBCUs in 2020 were greater than Howard University’s 150 plus year old endowment and would be the equivalent of someone donating approximately $15 billion to Harvard’s endowment, which Ms. Scott actually could do. Again, unprecedented.
We have expanded our review of the data collected to include more information regarding those major donations to HBCUs as well as their presence in the overall landscape of major donations to all colleges and universities. Are HBCUs getting their share? Although HBCUs make up three percent of the United States higher education ecosystem, they do not tend to receive three percent of the philanthropic donations or value. This year breaks the mold with HBCUs receiving over 11 percent of the major donations and over 15 percent of the major donation value. Unprecedented is putting it mildly. While this infusion is beyond needed and could not come at a better time as many higher education institutions across the country are having real questions of future and long-term fiscal viability, those with well position endowments have far less to worry about in their ability to have the resources necessary to pivot in an ever changing education landscape. Despite this landslide of donations, there are still no HBCUs with a $1 billion endowment or more. Howard University is still leading the way and looking like the inevitable first, but after Howard and Spelman, there are a myriad of questions and concerns as to the endowment health of every other HBCU.
Despite no African American having the wealth to give at the scale of MacKenzie Scott, it still begs the question of where are the African American wealthy in making major donations to HBCUs on a more consistent and sustainable basis. Only 4 of the 37 donations on 2020’s list come from African American families. George Floyd’s death was clearly a catalyst for much of this giving to African American institutions in 2020, but relying on Black death as a means to spur major giving is morally problematic and acutely unsustainable. There is no reason that this list every year is not made up of predominantly African Diaspora and African American households. For reasons that are complex though, that has still yet to happen. It is also worth noting which schools received donations. While the usual suspects of Morehouse College, Spelman College, and Howard University are there, one-third of the donations went to public HBCUs whom rarely find themselves in the philanthropic spotlight. Lesser known, but just as important HBCUs like Claflin University, Lincoln University (PA), and Xavier University (LA) also showed up. A vital need is for the smaller HBCUs to receive major gifts, HBCUs like Texas College, Florida Memorial University, Virginia University at Lynchburg also badly need to receive major gifts to shore up their fiscal futures. African American households must be the one to lead that charge if major giving to HBCUs is to be burning bright tomorrow and not just a firecracker today.
$1 Million Plus Donations To All Colleges: 329
$100 Million Plus Donations To All Colleges: 7
$1 Million Plus Donations Value To All Colleges: $4.7 Billion
$1 Million Plus Median Donation To All Colleges: $6.0 Million
$1 Million Plus Average Donation To All Colleges: $14.4 Million
$1 Million Plus Donations To HBCUs: 37*
$100 Million Plus Donations To HBCUs: 0
$1 Million Plus Donations Value To HBCUs: $716.7 Million
$1 Million Plus Median Donation To HBCUs: $20.0 Million
$1 Million Plus Average Donation To HBCUs: $19.4 Million
HBCU Percentage of Donations To All Colleges: 11.2%
HBCU Percentage of Donation Value To All Colleges: 15.2%
1. MacKenzie Scott (pictured) – $50 million Recipient: Prairie View A&M University Source of Wealth: Technology, Retail
2.MacKenzie Scott– $45 million Recipient: North Carolina A&T State University Source of Wealth: Technology, Retail
3. Reed Hastings & Patty Quillin – $40 million Recipient: Morehouse College Source of Wealth: Technology
4. Reed Hastings & Patty Quillin – $40 million Recipient: Spelman College Source of Wealth: Technology
5.Reed Hastings & Patty Quillin– $40 million Recipient: United Negro College Fund Source of Wealth: Technology
6.MacKenzie Scott– $40 million Recipient: Morgan State University Source of Wealth: Technology, Retail
7. MacKenzie Scott – $40 million Recipient: Norfolk State University Source of Wealth: Technology, Retail
8.MacKenzie Scott– $40 million Recipient: Howard University Source of Wealth: Technology, Retail
9.MacKenzie Scott– $30 million Recipient: Virginia State University Source of Wealth: Technology, Retail
10.MacKenzie Scott– $30 million Recipient: Winston-Salem State University Source of Wealth: Technology, Retail
11.MacKenzie Scott– $30 million Recipient: Hampton University Source of Wealth: Technology, Retail
12.MacKenzie Scott– $25 million Recipient: Alcorn State University Source of Wealth: Technology, Retail
13.MacKenzie Scott– $25 million Recipient: Bowie State University Source of Wealth: Technology, Retail
14. MacKenzie Scott – $20 million Recipient: Claflin University Source of Wealth: Technology, Retail
15.MacKenzie Scott– $20 million Recipient: Delaware State University Source of Wealth: Technology, Retail
16.MacKenzie Scott– $20 million Recipient: Lincoln University (PA) Source of Wealth: Technology, Retail
17.MacKenzie Scott– $20 million Recipient: Tuskegee University Source of Wealth: Technology, Retail
18. MacKenzie Scott – $20 million Recipient: Xavier University (Louisiana) Source of Wealth: Technology, Retail
19. MacKenzie Scott – $20 million Recipient: Morehouse College Source of Wealth: Technology, Retail
20.MacKenzie Scott– $20 million Recipient: University of Maryland-Eastern Shore Source of Wealth: Technology, Retail
21.MacKenzie Scott– $20 million Recipient: Spelman College Source of Wealth: Technology, Retail
22.MacKenzie Scott – $15 million Recipient: Clark Atlanta University Source of Wealth: Technology, Retail
23.MacKenzie Scott – $15 million Recipient: Elizabeth City State University Source of Wealth: Technology, Retail
24. Anonymous Donor – $10 million Recipient: Prairie View A&M University Source of Wealth: N/A
25. Bruce Karsh and Martha Karsh – $10 million Recipient: Howard University Source of Wealth: Finance
26. Seth Klarman and Beth Klarman – $10 million Recipient: Spelman College Source of Wealth: Finance
27.MacKenzie Scott– $6 million Recipient: Tougaloo College Source of Wealth: Technology, Retail
28.MacKenzie Scott– $5 million Recipient: Dillard University Source of Wealth: Technology, Retail
29. Oprah Winfrey – $2 million Recipient: Tennessee State University Source of Wealth: Media & Entertainment
30. Matthew Cullinan and Anna Reilly – $1.7 million Recipient: Winston-Salem State University Source of Wealth: Education
31. Jim Murren and Heather Murren – $1 million Recipient: Howard University Source of Wealth: Finance
32. Charles Butt – $1 million Recipient: Prairie View A&M University Source of Wealth: Retail
33. Charles Barkley – $1 million Recipient: Miles College Source of Wealth: Entertainment
34. Kenneth Chenault and Kathryn Chenault – $1 million Recipient: Morehouse College Source of Wealth: Finance
35. Joan Johnson – $1 million Recipient: Spelman College Source of Wealth: Retail
36. Frank Baker & Laura Day – $1 million Recipient: Spelman College Source of Wealth: Finance
37. Charles Barkley – $1 million Recipient: Tuskegee University Source of Wealth: Entertainment
Source: Chronicle of Philanthropy
*Michael Bloomberg’s pledge of $100 million in 2020 to the 4 HBCU medical schools was not included in our list which was sourced strictly from the Chronicle of Philanthropy.
In the fourth HBCU Money report on the SWAC/MEAC’s athletic finances, there has been one trend that is consistent – an acute amount of red on the balance sheet of each respective HBCU as it pertains to their athletic departments and it continues to grow redder and redder. Since HBCU Money first began reporting the SWAC/MEAC Athletic Financial Review, there have been losses of $128.6 million (2014-2015), $147.1 million (2016-2017), $150.7 million (2017-2018), and this year they continue their trend of the athletic black hole with losses over $161 million through athletics with no correction in sight. Not exactly the cash generating juggernauts that HBCU alumni have in mind when it comes to how deeply many believe that athletics can be the financial savior to HBCU financial prosperity. Instead, athletics seems to be potentially at the crux of many HBCU financial woes. Almost unfathomable is that many in the SWAC/MEAC have athletic budgets higher than their research budgets.
The harsh reality is that even with all the popularity buzz generated by Jackson State University’s head football coach, Deion Sanders, the factors working against HBCU athletics ever achieving real profitability remains a pipe dream at best. To land a major television contract, which is the only reason on mass that the SEC and Big 10 are the profitable athletic programs they are requires something that HBCU alumni bases severely lack. Large fan bases that have high incomes and an affluence. The harsh reality that HBCUs have small alumni bases, a reality that has been exacerbated post-desegregation where now HBCUs only get 9 percent of African Americans in college, combined with African America having both the lowest median income and wealth do not make for a recipe for advertisers to pay top dollar to television stations who would then healthily compensate HBCU institutions. HBCU athletics can be profitable, but it requires a completely different business model than our PWI counterparts. See, “The 5 Steps To HBCU Athletic Profitability”.
HBCU athletic revenues went down while expenses and subsidies went up in 2019-2020. That is usually a trend all would prefer be flipped. Students continue to bear the brunt of generating HBCU athletic revenues. This year’s review shows that approximately 73 percent of HBCU athletic revenues are generated through subsidies, up from 70 percent the year prior. Something to consider when 90 percent of HBCU students graduate with student loan debt.
REVENUES (in millions)
Total: $200.4 (down 1.2% from 2017-2018)
Median: $10.3 (down 4.6% from 2017-2018)
Average: $10.6 (up 5.0% from 2017-2018)
Highest revenue: Prairie View A&M University $18.7 million
Lowest revenue: Coppin State University $2.8 million
EXPENSES (in millions)
Total: $213.0 (up 0.5% from 2017-2018)
Median: $12.5 (up 15.7% from 2017-2018)
Average: $11.2 (up 5.7% from 2017-2018)
Highest expenses: Prairie View A&M University $18.7 million
Lowest expenses: Mississippi Valley State University $3.9 million
SUBSIDY
Total: $148.4 (up 4.9% from 2017-2018)
Median: $6.4 (down 18.4% from 2017-2018)
Average: $7.1 (unchanged from 2017-2018)
Highest subsidy: Prairie View A&M University $15.5 million
Lowest subsidy: Coppin State University $1.7 million
Highest % of revenues: Delaware State University: 92.0%
Lowest % of revenues: Florida A&M University: 37.0%
PROFIT/LOSS (W/ SUBSIDY)
Total: $-12.7 million (down 40.0% from 2017-2018)
Median: $0 (up 100.0% from 2017-2018)
Average: $-666,295 (down 46.3% from 2017-2018)
Highest profit/loss: North Carolina A&T State University $615,094
Lowest profit/loss: North Carolina Central University $-6,264,082
PROFIT/LOSS (W/O SUBSIDY)
Total: $-161.0 million (down 6.8% from 2017-2018)
Median: $-9.8 million (down 40.0% from 2017-2018)
Average: $-8.5 million (down 13.3% from 2017-2018)
Highest profit/loss: Mississippi Valley State University $-2,177,123
Lowest profit/loss: Prairie View A&M University $-15,417,471
CONCLUSION: At current, it would take an approximately $4.3 billion endowment dedicated to athletics to ween the SWAC/MEAC off of these subsidies onto a sustainable path. A sum greater than all HBCU endowments combined. Perhaps through merchandise sales, Jackson State could see its way to profitability without subsidies. Perhaps, but as former HBCU alumnus and NFL Hall of Famer Shannon Sharpe recently said, “There is only one Deion Sanders”. One thing is for certain, HBCUs have not done a proper cost-benefit analysis for the money they spend and subsidize to their athletic departments nor have they explored potential alternative models.
Editor’s Note: Howard and Bethune-Cookman are excluded in this report because they are private institutions and their athletic finances were not included in this report.
HBCU Money 