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HBCU Money’s 2018 Top 10 HBCU Endowments


The past 365 days for HBCU endowments has seen a lot of press, mainly led by Bennett College’s #StandWithBennett campaign as the school is embattled and was raising money to retain its accreditation and keep the doors open. A constant reminder of the fragility of HBCUs and their financial uncertainty. Economic conditions in the United States have made overall growth in higher education tempered and with it HBCU endowments have been a mixed bag. While the top ten HBCU endowments have five endowments that beat the median increase in endowment market value, only two endowments beat the national average. In comparison the top ten PWI endowments had eight endowments beat the national median average and seven of the ten exceeding the national average.

Over the past 12 months, the top ten HBCU endowments have increased their market value by $134.5 million or an increase of 7.4 percent over last year. There is plenty of argument that HBCUs should not be compared to the largest PWI endowments in behavior and instead to schools that are comparable in their size and scope. This is certainly a valid argument, but at a time when there are more PWIs with $1 billion plus endowments than there are HBCUs, it maybe hard to continue to lean on such an argument. The reason being is that higher education in general is experiencing and going to continue to consolidation and contraction with education alternatives entering the market. Smaller colleges and HBCUs are going to have to be over capitalized and nimble in order to shift to changing market demands and conditions. At the moment, over 90 percent of HBCUs do not have even $100 million endowments leaving them highly vulnerable as we have seen with the closure of a number of HBCUs in recent years and more than just Bennett in current crisis.

This year we included more than just the top ten, but all HBCUs who reported to NACUBO, which is the reporting endowment organization we use to keep our reporting date uniformed.

All values are in millions ($000)

1. Howard University – $688,562 (6.5%)

2. Spelman College – $389,207 (6.3%)

3.  Hampton University – $285,345 (2.2%)

4.  Meharry Medical College – $159,908 (4.1%)

5.  Morehouse College – $145,139 (2.6%)

6.  North Carolina A&T State University  – $63,827 (14.9%)

7.  University of the Virgin Islands – $61,491 (10.7%)

8.  Tennessee State University – $58,697 (5.1%)

9.  Texas Southern University – $58,158 (7.4%)

10.  Virginia State University – $54,479 (6.6%)

OTHERS REPORTING:

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: 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 FY2016 to FY2017 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.

HBCU Money’s 2016 Top 10 HBCU Endowments


piggybank

2016 was a rough year for the world, it was even afforded a scary movie trailer, and top ten HBCU endowments were not spared the carnage. Eight out of the top ten HBCU endowments saw negative changes in their market value. The only two to be spared the rod were Meharry Medical College and rising supernova, University of Virgin Islands, who not only led all HBCUs in market value percentage increase, but was second among all American and Canadian institutions reporting in that category. Howard University continues to hold the number one spot and sheer inertia could carry it onto becoming the first billion dollar HBCU endowment. However, after being the star of the top ten last year, Howard finds itself the dog of the show this year with the worst market value percentage performance.

Since breaking into the top ten a few years ago, University of Virgin Islands continues its ascension up the ranks. It is clear they have the special sauce in the islands and if the winds continue in their favor, then the school in Nassau could give HBCUs its sixth endowment over $100 million in short order. Another notable endowment, Texas College with an endowment of only $3.2 million, did see the second highest market change percentage of HBCUs at 6.8 percent.

After a notable absence last year, Florida A&M University, has returned to the list and takes its place as HBCU nation’s fifth endowment over $100 million. This in comparison to 93 of the 799 HWCUs reporting with endowments over the $1 billion mark. Reminding us there is a long way to go before institutional economic equality is achieved.

As always, if you do not see your HBCU in the top 10 – DONATE!**

Endowment in millions $000 (Change in Market Value*)

1. Howard University – $685 775  (-8.5%)

2. Spelman College – $346 789 (-4.5%)

3.  Hampton University – $253 814 (-3.6%)

4.  Meharry Medical College – $142 703 (2.6%)

5. Florida A&M University – $113 117 (N/A)

6.  University of the Virgin Islands – $54 968 (60.4%)

7.  Tennessee State University – $50 246 (-2.3%)

8.  Texas Southern University – $48 163 (-1.1%)

9.  North Carolina A&T State University  – $48 074 (-0.1%)

10. . Virginia State University – $45 812 (-3.4%)

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.

endowment-works-1

*Note: 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 FY2015 to FY2016 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.

** Notable exclusions to the list that HBCU Money believes would otherwise make the top ten are Morehouse College, Tuskegee University, and Dillard University. These HBCUs have never reported their endowment to NACUBO in the time HBCU Money has been recording its annual top ten endowments.

Additional Notes:
NACUBO Average Endowment – $640 737 (-2.9%)
NACUBO Median Endowment – $120 330 (-1.3%)
Top 10 HWCU Endowments combined – $182.5 billion
Source: National Association of College & University Business Officers

The HBCU Endowment Feature – Texas College


Official Seal - Texas College

School Name: Texas College

Median Cost of Attendance: $17 208

Undergraduate Population: 878

Endowment Needed: $302 172 480

Analysis: Texas College needs approximately $300 million for all of its students to attend debt free. Located 100 miles from Dallas, TX and 90 miles from Shreveport, LA puts Texas College in a sweet spot geographically. This could allow the school to grow triple in size in a very short period if its infrastructure could keep up with such exponential growth. Part of this growth could easily come from establishing a relationship for transfers from Southern University-Shreveport which is a two-year HBCU. Texas College is actually closer to SU-S than the flagship Southern University-Baton Rouge and could easily sway students who want to be away from home but not more than a few hours. With less than 1000 students the school needs to hit a growth spurt and fast in order to graduate enough alumni on an annual basis and increase the donor pool available to it. Of course at its current size there is the opportunity to build very intimate relationships with these graduates and establish donor relationship much earlier and on a personal basis. Texas College in 2012 led all HBCUs reported in NACUBO in terms of return on investment at 12.8 percent in a year when 70 percent of the top ten HBCU endowments had negative returns. This type of continued performance could bode well for them if they can get the raw dollars to boost the size of the money it is managing. The school has the talent to manage the money but its demographics need to grow for it become a relevant endowment in this era of expand or die.

As always it should be noted that endowments provide a myriad of subsidies to the university for everything from scholarship, faculty & administration salaries, research, and much more.