When the PWIs have a cold, then HBCUs have pneumonia. That common saying in African America is as true today as it has ever been and among HBCU endowments in 2022 it reverberated across the landscape. Of the top ten HBCUs that reported their endowments to NACUBO that only two out of ten showed a positive gain versus three out of ten showing positive gains among PWIs. The caveat there is the top PWI endowments are all operating with a minimum of $15 billion. An amount that ranges from six times the size of all HBCU top ten endowments combined and all the way up to twenty four times the size of the top ten HBCU endowments combined by UTIMCO, the managing entity of the Texas A&M and University of Texas endowments. UTIMCO is actually $10 billion larger than Harvard’s endowment. It poses an interesting lesson that many HBCUs should consider – merging their endowments and/or foundations for economic and capital scale capabilities. Virginia State University and Norfolk State University. Prairie View A&M University and Texas Southern University. A really aggressive strategy of course would be to have endowments at the conference level, but that will be an article for another time.
2022 was a down year in the markets which inevitably had an outsized negative impact on HBCU endowments who are less likely to be invested in venture capital, private equity, or other alternative investments that hedge against the volatility of the stock markets. HBCU endowments limited capital usually means limited investment options and those options tend to be heavily tied to public equity markets. It also did not help that just a few years removed from George Floyd’s death when HBCUs saw over thirty million dollar plus donations that in 2022, HBCUs only saw a whopping three while their PWI counterparts had fourteen donations over $100 million.
Without HBCUs capturing more than ten percent of the African American students going to college, then this struggle is likely to persist. Simply put, HBCUs need much larger alumni pools to even start to put a dent in the endowment gap long term.
The PWI-HBCU Endowment Gap for 2022 stands at $127.5 to $1, which is an increase from 2021’s $121.7 to $1.
*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.
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.
If there was a short analysis of the 2021 HBCU endowment list it would be this – still not enough. Despite record breaking donations toward HBCUs from Mackenzie Scott and others in 2020-2021, the PWI-HBCU endowment gap among the Top 10 PWIs and HBCUs continues to balloon, a gap that stands at a staggering $121 to $1. This despite a 35 percent increase by the Top 10 HBCU endowments from last year. Simply put, winning the philanthropic “lottery” is not enough and it never will be when it comes to closing the endowment gap. The rabbit never beats the tortoise to put it another way. HBCUs must find a way to find consistent capital infusions over time as opposed to lighting quick one-offs.
The HBCU donor pool is simply too small and too poor (relatively speaking) to close the endowment gap. Without increasing the percentage of African Americans college students who go to HBCUs from 10 percent to 25-30 percent, it does not bode well for HBCUs to be able to close the endowment gap through traditional means. HBCUs and their alumni are going to have to be more creative and must be so expeditiously. While this is the most HBCU endowments we have ever reported with $100 million or greater, increasing from five in 2020 to seven in 2021, PWIs saw an 25 percent increase in the number of endowments over $2 billion going from 55 to 69 and an equally 25 percent rise in the number of endowments over $1 billion going from 114 to 142. This while HBCUs are still waiting for their first billion dollar endowment.
To that point, the race between Howard and Spelman is tightening. Last year’s $334 million lead that Howard held over Spelman has shrunk to $265 million. At one point it seemed a foregone conclusion that Howard would reach the milestone first (The Race To The First Billion Dollar HBCU Endowment: Can Anyone Catch Howard?), that is no longer the case. Howard’s public relations over the past year have not been favorable and while many people say all press is good press – not when you are an African American institution. With Hampton and North Carolina A&T’s departure from the MEAC, no HBCU conference (CIAA, GCAC, MEAC, SIAC, SWAC) is dominating the Top 10 and the list is split 50/50 between private and public HBCUs as well. Arguably this is the most diverse Top 10 HBCU endowment list since we first began publishing, but one thing remains feverishly consistent and that is there is a lot of work to be done to ensure HBCU endowments and therefore the institutions of HBCUs are sustainable and thriving.
*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 FY20 to FY21 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.
For the first time since we began reporting the Top Ten HBCU endowments, an HBCU endowment that we knew should be present but was not reporting is now present – Morehouse College. Hopefully next year we will see Tuskegee University join the fray. This provides a far more accurate picture of the HBCU endowment picture, at least at the top. While many will wonder why the endowments do not appear larger after massive donations that happen in 2020, it should be understood that many donations will not be reflective in the institutions endowment figures until fiscal year 2021 is reported so expect to see massive jumps for many HBCUs in the next calendar year.
However, examining the HBCU endowment world prior Mackenzie Scott’s 2020 philanthropy shows Howard University powering ahead toward becoming the first HBCU endowment to $1 billion. Their lead over number two Spelman extended from $302 million in 2019 to $355 million in 2020. Unfortunately, only four of the ten HBCU endowments saw increases in their endowment market value, while amongst the PWI’s Top Ten endowments all ten saw increases in their market value.* The Top Ten PWI endowments for 2020 combined for $199.8 billion versus $2 billion for the Top Ten HBCU endowments showing an institutional wealth gap of almost $100 to $1.
There is going to be a continued mixed bag of endowment reality among HBCUs. The Have and Have Nots among HBCU endowments has exacerbated and despite the attention during 2020 most smaller HBCUs have yet to secure donations that would secure their future. Even many of those who did are still sitting in a precarious perch. The NACUBO average endowment is over $907 million, an amount that is almost five times the average HBCU endowment and an average that not even Howard has reached yet. This means that while the “lottery” donations from non-HBCU sources is great, it absolutely does not remove the charge from HBCU alumni of being vigilant givers to their institutions. If HBCUs could simply get more of their alumni giving small amounts on a consistent basis that would do wonders for improving endowments. It goes without saying the other reality is that all HBCUs need to increase their student populations so that they are graduating more alumni and therefore more potential donors.
*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 FY19 to FY20 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.
HBCU Money 