Tag Archives: philanthropy

Will Morehouse’s 2019 Class Be The Greatest Donors In HBCU History? After Robert F. Smith’s Donation, They Better Be


“The results of philanthropy are always beyond calculation.” – Mary R. Beard

By now we have all heard the breaking news, on May 19th in the year of our lord 2019, Robert F. Smith, an angel of God descended upon the sacred grounds of the AUC in Atlanta, Georgia and in his commencement speech to an estimated 400 Morehouse College graduates also pledged to ensure that his family would pay off each and every one of their student loans. The grant is estimated to be a gift valued at $40 million making it the second largest donation to the HBCU community, still trailing Bill and Camille Cosby’s gift of $20 million in 1988 to Spelman College, which adjusted for inflation is valued at $43.2 million today. Stating the obvious, there still has yet to be a gift of $100 million or more in HBCU history, while HWCUs received 13 gifts of $100 million or more in 2018 alone. This is not to take away at all from Mr. Smith’s gift as the reality that the return on investment to HBCUs  on gifts of $10 million or more are often worth a multiplier effect because of the size of our schools, how starved we are for donations of any sort especially major ones, and lastly our schools often being so adept at doing more with less that when we get more it often feels like it maybe overwhelming (it is not, please feel free to give any HBCU $100 million, seriously). But what will this gift mean to the HBCU landscape for the coming generation?

You hear it all the time among recent HBCU graduates and alumni when asked what are some of their primary reasons for not giving back. At the top of the list tends to pertain to the burden of their student loan debt. It is no secret that HBCU students bear a serious burden when it comes to student loan debt in comparison to their HWCU counterparts, especially those counterparts who attend an institution that is among the Top 50 in college endowments. In our 2016-2017 HBCU Graduate Student Loan Report, 86 percent of HBCU graduates finish with student loan debt at a median debt load of $34,131 versus 40 percent of Top 50 college endowment graduates who finish with student loan debt at a median debt load of $24,237. This is due to a mixture of factors, most notably HBCU endowments and familial wealth.

The top 30 college endowments in America control over 50 percent of the nation’s $500 billion college endowment value, while 100 plus HBCUs control less than 1 percent. Combine this with the African/European American wealth gap not moving for 50 years, which according to a Forbes article, “African-Americans had a median wealth of $13,460 in 2016 or only 9.5% of the median wealth of $142,180 of whites”. These major pinpoints make it extremely difficult for HBCU graduates to reduce their student debt loads while matriculating and therefore build wealth after college. The result becomes they are either prolonged before they can become donors or never do and the sword of educated poverty is what they and our institutions fall upon decade after decade with no end in sight.

Morehouse College Class of 2019 though sits in a special position to change the trajectory of not only Morehouse College’s endowment, which we have argued has grossly under performed compared with the likes of Hampton, Spelman, and Howard in its fundraising efforts. This despite the help from the likes of another billionaire, Oprah Winfrey, who herself as put hundreds of Morehouse Men through college as well. To what extent her giving to Morehouse has reduced student loan debt for graduates is unknown, but knowing Ms. Winfrey’s giving history, it has been formidable. However, the Class of 2019 may prove to be worth a longitudinal study in HBCU philanthropy. What happens when an HBCU graduate finishes with little or in this case no student loan debt? Do they see it as an opportunity to be more active donors back to their institution and to other HBCUs. Will their donor rate be higher than other classes? It is no secret that despite the Morehouse pride, the alumni giving rate at the institution has been underwhelming at best. If these 400 young men properly build their wealth and give back to Morehouse and other HBCUs, then have we potentially unlocked one of the keys to making our institutions sustainable? We have also long argued what it would look like if African Americans supported HBCUs in a major way, even if they did not attend an HBCU. Giving because a strong African American institution of any sort is a reflection of themselves in society and that our fates are always intertwined. That a people are ultimately only as strong as the institutions that represent their interest.

However, to do what Robert F. Smith did on an institutional level is going to require more than just one billionaire (or even two), but it is definitely a pivotal step in the right direction – hopefully. After all, it has been over three decades since a donation of this size for HBCUs. The lack of multimillion dollar gifts to HBCUs and African American educational institutions in general has been, continues to be, and is problematic systemically. For instance, if we extrapolated the notion of helping HBCU graduates be debt free, endowments at our institutions would have to be exponentially greater than what they are now. Howard University, Spelman College, and Hampton University, the three largest HBCU endowments, which have current endowments of $688 million, $389 million, and $285 million, respectively, would need endowments exceeding $6 billion, $1.7 billion, and $2.5 billion, respectively. In other words, they currently have a combined endowment value of $1.4 billion but need $10.2 billion, which is a margin of $8.8 billion, greater than Robert F. Smith and Oprah Winfrey’s wealth combined, an estimated $7.6 billion. This of course speaks nothing of and to the number of HBCUs who are hanging on for dear financial life and whose endowments if they even exist are paltry at best. Like many small and state colleges, lesser known HBCUs struggle to attract major donors, but the Morehouse 400 does/should know who they are and should take the vanguard in being integral over the next 50-60 years of ensuring that all HBCUs drink from the fountain of opportunity that they have been granted access too. These young men have a chance to alter the trajectory of the HBCU universe and we hope with this great opportunity they have been gifted that they also know comes a great responsibility. Will they become the greatest HBCU donors in HBCU history? Only time will tell.

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Abandoned By (Black) America: HBCU Endowments Less Than One Percent of American College Fortunes


A great nation cannot abandon its responsibilities. Responsibilities abandoned today return as more acute crises tomorrow. – Gerald Ford

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There are two houses and two families, we will call them the Smiths and Jacksons for the sake of this story, who are living next door to each other in a neighborhood. The Smith family in one household are preparing for a feast as it seems they do every night. Meanwhile, the Jackson family prepares their own feast, but just as they do every night at dinner they pack all their food up and walk next door to their neighbors home and knock on the door. The Smiths open the door as always with a smile and greet their neighbors and take the food they fixed and promptly slam the door in the Jacksons face. They add the food to their already illustrious feast without as much a second thought that they have more food than they need and that the Jacksons once again gave them all of their dinner. The Jackson family stands by an open window where they can smell the feast that they and the Smiths cooked as it sits on the Smiths’ table. Yet, they are offered nothing but the aroma. Eventually, the Jacksons return to their home starving and as every night goes, one of the children ask the parents, “Why do we give them our food when we have a table here to eat our food on?” At which time the parents always reply, “Because our food taste better on their table,” to their children who eventually will feed their malnourished and lean bodies with the bread and water they always receive after this affair. The children confused by this statement from their parents further inquire how do they know it taste better on the Smiths table. Their parents tell them of a time when they were allowed to sit at the Smiths’ back door and have a taste of the food and it definitely tasted better. The Jackson parents insisted it had to be because of the Smiths’ beautiful table, even though the food came from their kitchen. Then the children as they always do plead with their parents to allow them to keep the dinner tomorrow so that they can grow to be big and strong and one day they will be able to build all the fine things their parents see in the Smiths’ window. However, the parents tell them that when the Smiths cut wood for their home they cut it better than they did, that when they build furniture they build it finer because they have better tools, and when they serve drinks their drinks taste better because of course, their ice is colder. So the Jacksons continue to resound to every night giving their dinner away in hopes of one day being allowed to eat their own food at another’s table. And so has been the relationship to African America and its own institutions.

Over the past 60 years, African America has, save for the black church, been on an expedited exodus from supporting, building, and controlling its own institutions for the colder ice of their neighbors in the hopes that they would one day be allowed to sit at their neighbors’ table. This despite during the post-antebellum period up until World War II when African America started, controlled, owned, and supported institutions of commerce, education, politics, health, and more all within their own municipalities. Five hundred hospitals at one point, one hundred boarding schools, thousands of businesses, and yes over one hundred what we know today as Historically Black Colleges and Universities. Now, that first seventy some years of blacksmithmanship that built these institutions after the Civil War has been replaced by a culture of abandonment over the past sixty years.

In a recent article, Forbes highlights the institutional wealth disparity that exist within United States higher education institutions. A national system that comprises approximately 3 000 colleges and universities across the country have a combined endowment value of $500 billion. Yet, at HBCUs who comprise approximately three percent of the nation’s college and universities have combined endowments of roughly $2.5 billion or 0.5 percent, while 30 colleges/universities with the largest endowments hold $260 billion of the pie or 52 percent. Yes, 30 colleges have more in endowments than 2 970 colleges and universities combined and over 100 times the amount one hundred HBCUs hold in their coffers. HBCU endowments are not even representative of their representation. Who is to blame for such an anemic number? Well, ironically if you ask many African Americans they will lay the blame at the feet of HBCUs and the alumni who attended them for not giving back as they should. The irony of course being that ninety percent of African Americans who attend college today choose to do so at non-HBCUs. At the University of Phoenix, a for-profit college, almost twenty percent of its 213 000 student body is African American. An amount equal to roughly ten percent of the entire HBCU student population. This despite the University of Phoenix’s degrees not being worth the paper they are printed on, but they are not a Black institution so therefore it must be a better education, right? Never mind the percent of African Americans who decide to attend elite PWIs and take their intellectual capital out of the African American ecosystem. We are quite literally using our intellectual capital to build others research and academic prowess and deepening the institutional gap between African America and the rest of America.

The economic cost of abandonment by African American to HBCUs is hard to put an accurate figure on because the $125 that the African American graduate in 1969 did not donate to an HBCU and a bunch of probability factors would require a doctoral thesis and years of research, but an abstract analysis is possible. To note, for every $125 in 1969 that had been invested in the stock market with traditional returns would be worth just under $23 000 today, which in a moment you will see the relevance. Currently, there are approximately 20 million Americans in college, African America comprises 3 million of that population, and 2.7 million of that 3 million attend non-HBCUs. The average annual cost of college in the United States is $22 000 annually, valuing African America’s tuition revenue at $66 billion annually, but $59.4 billion of it is in non-HBCUs. HBCUs as a whole receive only 1.5 percent of America’s total current tuition revenue pie. When it comes philanthropy, numbers are even starker. In 2015, HBCUs received only 4 of the 530 donations (0.7 percent) that were $1 million or more to colleges and universities. Those four donations totaled $7 million, while the the top four to non-HBCUs combined for $950 million. The latter being an amount equal to almost 40 percent of HBCU endowments combined. Yes, in one year, four donations to HWCU/PWIs equalled almost half of what has taken HBCUs over one hundred years to accumulate.

Philanthropy for colleges ultimately boils down to two things. Either have a very large alumni base or produce very wealth alumni who procure their money through high-paying professions or entrepreneurial pursuits. The first sometimes increases the odds of the second, but there are certainly other factors as well. However, the first is the easiest to ensure a larger endowment just based on statistics. Inside Higher Education reported, “The participation rate in 2014 was 8.3 percent, compared to 8.7 percent in 2013. At private liberal arts colleges, which as a group always have higher alumni giving rates, about 20 percent of alumni donate.” That means that overall, out of every 100 students who attend college, eight of them will be active donors. A number that swings widely depending on the engagement of the school’s development office, alumni associations, etc. Or in the current case of the estimated 300 000 students at HBCUs, only 24 000 of them are likely donors. Yet, obviously if instead of only ten percent of African American students attended HBCUs, ninety percent did, then you would have alumni donor pool of 216 000 or nine times greater.

HBCUs must go for numbers because over the past sixty years as we abandoned our institutions (except the church) our wealth also plummeted post World War II. As a result today, African American median wealth according to the Laura Chin via the U.S. Census, “In absolute terms, the median white household had $111,146 in wealth holdings in 2011, compared to $7,113 for the median black household and $8,348 for the median Latino household.” The melancholy of HBCUs primary donor pool suffers the compounding impact of being sixteen times poorer and attracting only 1 out of 10 of the population it was built to serve coupled with only eight percent of the 1 out of 10 giving back. That means in essence over the past thirty years, less than one percent of African Americans who attended college from all colleges will have donated to an HBCU. A somber reality no matter how you look at it. Especially when you are trying to maximize the dollar given to have the most impact on African America.

However, recent events have shown there might be a resurgence in the long-term outlook for HBCU endowments. African American owned banks and credit unions have seen a resurgence as millions in deposits have poured back into their coffers as African America looks to gain more control over their communities. In recent years, HBCUs like Morehouse, Claflin, and Langston University have seen record breaking numbers of freshmen classes. This will only bode well for the future of that eight percent donor pool and the probability of $1 million or more donors as African America is creating more businesses than any other group in America currently, a key to wealth creation. The past 60 years may have been the dark ages for HBCUs and their endowments, but a new golden age maybe on the horizon indeed. It maybe time to set that dinner table after all.

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

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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

HBCU Money™ Business Book Feature – The Foundation: A Great American Secret


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Private foundations have been the dynamo of social change since their invention at the beginning of the last century. Yet just over 10 percent of the public knows they even exist; and for those who are aware of them, as well as even those who seek grants from them, their internal workings remain a complete mystery. Joel Fleishman knows the sector like few others, and in this groundbreaking book he explains both the history of foundations—with their fledgling beginnings in the era of the robber barons seeking social respectability—through to the present day. This book shows how, why foundations matters, and how the future of foundations can provide a vital spur to the engine of the American, and the world’s, economy—if they are properly established and run.

Paving the Road to Sustainable Alumni Support for HBCUs


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“Philanthropy without scale and sustainability is like any other bad business that will simply wither and die on the vine.” – Naveen Jain

Since 1837 historically Black colleges and universities (HBCUs) have played a vital role educating students. Prominent activists and scholars including Nikki Giovanni, Toni Morrison and Thurgood Marshall benefited from attending HBCUs with supportive environments. The emphasis on cultural pride, scholarship and political acumen transform the lives of students from underserved communities. In comparison to predominantly White institutions (PWIs), HBCUs enroll more underserved, first generation and minority students. Upon their arrival on campus students are surrounded by majestic trees, serene suburban landscapes or colorful urban enclaves. However, despite their idyllic settings HBCUs are at a crossroads. The closing of Saint Paul’s College in 2013, Morris Brown College’s bankruptcy filing in 2012, Lewis College of Business uncertain status, and nine other HBCU closings over the years highlight the fragility of HBCUs in through the years into the present. Ensuring our institutions remain viable is predicated on the financial support of alumni, administrators, faculty, stakeholders, students and trustees.

Dramatically increasing donations to HBCUs would alleviate the financial strain that has plagued prominent institutions including South Carolina State and Grambling State University. Unfortunately several factors have contributed to the financial crisis at HBCUs including: inequitable funding, shifting federal and state policies and limited alumni contributions. To the last point, HBCU Money found that only 1 out of the 559 $1 million or over donations to colleges in 2013 and 9 out of the 517 $1 million or over donations in 2014 to colleges went to HBCUs.  Although HBCU alumni are among the most dedicated graduates they are more likely to come from underserved communities and leave with more loan debt in comparison to students from larger PWIs. The stark difference between HBCUs and PWIs regarding alumni contributions and endowments is problematic. For example, Harvard University’s estimated $30 billion endowment far exceeds Howard University’s estimated $586 million endowment. Pundits would argue that comparing Harvard and Howard is unfair; however, the funding gap reflects the uphill battle HBCUs have encountered since their inception.

While HBCUs face challenges overcoming fiscal crisis, the Black community has always worked together collectively to avert financial disaster. For instance, the efforts of alumni and students at South Carolina State highlight the importance of exerting political pressure to ensure our institutions remain open – political capital that is a lot easier to build and exert if the community wielded more economic power. Despite the trials and tribulations HBCUs are allying with supporters to challenge the non-HBCU owned media’s deficit orientated focus. Increasingly administrators and alumni are taking steps to change the narrative regarding HBCUs focusing on their history fighting for Civil Rights. The renewed emphasis on social justice and growth of social media could become a rallying point for stakeholders. Recently, HBCU alumni have raised money to increase institutional aid for students from underserved communities.

The I Love Howard campaign is an example how HBCU graduates are using social media and grassroots efforts to galvanize graduates. Led by Howard University alumnae Michelle Jayne, Jessica Neal and Rochee Jeffrey the campaign is making strides engaging alumni and supporters to protect Howard’s legacy. Ensuring post-secondary institutions including Howard have networks that are fighting for increased funding could turn the tide for HBCUs. For instance, fundraisers, online telethons, social media campaigns, after work mixers and private/public partnerships are practical options for alumni.

Encouraging students to identify conventional or unconventional methods to increase donations should begin freshman year. Campaigns that urge students to give as little as $1 highlight the important role donations play in sustaining critical programs. Without support from alumni HBCUs are susceptible to cuts in federal and state funding that hamper efforts to recruit talented students. Schools including Claflin University recognize increasing donations is linked to the institutions future success.

Claflin, 2015’s HBCU of the Year, received funding from the Kresge Foundation and the United Negro College Fund to strengthen fundraising efforts. Claflin designed a campaign encouraging alumni, faculty, parents and students to donate. In 2013, the alumni giving rate increased nearly 10% from 43% to 52%. This year the university announced they raised nearly $90 million for phase one of the capital campaign. The success of Claflin underscores the commitment from supporters. HBCUs with a low alumni giving rate should use Claflin as a template to increase overall support. Strengthening HBCUs through campaigns can fund endowments, repair and renovate dilapidated facilities and recruit students.

Ensuring HBCUs continue their mission educating African American students is linked to financial support from alumni and students. Although HBCUs enroll more students from underserved communities in comparison to PWIs they are equipped to encourage alumni to provide critical funding. For example, Black greek letter organizations, concerts, football classics, homecoming and regional alumni events present opportunities to reach out to newly minted graduates. In addition, developing partnerships with African American (and African if they are really ambitious) corporations and philanthropic organizations are important for institutions dependent on external funding. The future for HBCUs is bright, but increased donations will ensure they develop a new cadre of entrepreneurs,  Nobel Laureates and Pulitzer Prize winners.