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A Patent Created Is A Million Earned: HBCUs Are Not Keeping Pace In The Intellectual Property Arms Race Among American Colleges


“Necessity…the mother of invention.” – Plato

How did David beat Goliath, then go on to become a “Goliath” himself? With a rock, pebble, or stone depending on who is telling the story. However, it is truly what that piece of Earth hurling towards his enemy from his cache represented that is often most lost in the story. After all, most stories in the Bible are parables and in this case, while David gets all of the glory, it was truly the slingshot that was the star. The slingshot represented an idea, ingenuity, and research all at the same time. It was a representation of how even the smallest solutions can tackle the biggest problems and for David, the riches represent what is awarded to those who dare go after them.

What is a patent? According to the definition provided by the World Intellectual Property Organization, “A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. To get a patent, technical information about the invention must be disclosed to the public in a patent application.”

From 1969 to 2012, the U.S. Patent & Trademark Office granted 75,353 to America’s colleges and universities. However, during that same period HBCUs were granted an apathetic 101 patents, an amount less than one percent (0.13% to be exact) is a telling story of just one of the factors that hold back HBCUs financial sustainability. In the past twenty years alone since the turn of the 21st century, patents to colleges and universities have increased from 1,307 to 5,898, an almost five fold increase. In the same time period, the value of the revenue from those patents has also seen a meteoric rise to the tune of a 1,700 percent increase in value from $130 million annually to a staggering $2.2 billion annually. This does not even factor in the societal relevance that these institutions beget as a result. Can you imagine the financial and social impact that comes with being the college who invented the seat belt (Cornell University) or an even more well known invention, Gatorade (University of Florida)? The latter has earned the University of Florida over $1 billion in royalties alone. Even more to the point of colleges and universities profiting handsomely from intellectual property, according to an article in IP Watchdog in 2017, “a judge ordered Apple to pay the University of Wisconsin $506 million for infringing one of its tech patents. Last year, Carnegie-Mellon University won $750 million in a patent infringement lawsuit against Marvell Technology Group.” Those two settlements alone are worth fifty percent of all HBCU endowments combined. Needless to say, this is an arena that HBCUs need to make inroads into if survival and sustainability are long-term goals for our institutions.

PATENTS BY HBCU (1969-2012)

  1. Howard University – 18
  2. Morehouse School of Medicine – 17
  3. Florida A&M University – 16
  4. North Carolina A&T State University – 12
  5. Hampton University – 10
  6. Spelman College – 6
  7. Jackson State University – 4
  8. North Carolina Central University – 4
  9. Meharry Medical College – 3
  10. Tuskegee University – 2
  11. Alabama A&M University – 1
  12. Alabama A&M University Institute – 1
  13. Alcorn State University – 1
  14. Charles R. Drew University of Medicine – 1
  15. Claflin University – 1
  16. Delaware State University Foundation – 1
  17. Fort Valley State College – 1
  18. Shaw University – 1
  19. Virginia State University – 1
  20. Bowie State University – 1*

For all of the creativity that our culture has and exist on our campuses from faculty to students and more, there is little if any at times from administrations and alumni when it comes to finding creative solutions to our financial issues. Since desegregation took root in our institutions and began to gut them, a financial crisis has been brewing and its presence shows up every time we see another HBCU close its doors and even more starkly today in the amount of student loan debt HBCU graduates finish with as a result of poor endowments. HBCUs have taken on a what has seemingly become a check to check mentality in dealing with its financial viability. Instead of investments in R&D and entrepreneurship (Can HBCUs Produce Billionaires?), which is where the nation’s wealth has truly been generated for colleges and their alumni, we have seen far too many HBCUs and their alumni seemingly double down on being dependent on tuition revenue, make poor investments in athletics with no real return possible, focusing their students on getting jobs not creating them, and at times a feeling of lip service in relation to developing stronger pre-alumni and alumni programs that would strengthen giving.

It begs the question where do we go from here? How do we get administrations to ensure that intellectual property & patent development is a stronger part of its focus and how do we get alumni to give their time and money in a way that compliments and assist HBCUs in the infrastructure needed for said development? And ultimately, how do we turn our campuses into intellectual property machines? Let us examine, just a few points (but certainly not limited too) what HBCUs and their alumni could do to unleash its intellectual prowess:

First and foremost, we have to look at our research, patent development, and the like from a holistic viewpoint, meaning that anyone and any department on campus can be engaged in this process. That means everyone from the traditional route of professors and researchers to students to staff to cafeteria workers or lawn and building maintenance. Everyone must be part of this and everyone must be mentally engaged and present. A patent can come from anywhere and for us it needs too. For example, Paul Quinn a few years ago eliminated salt and pork from its campus, but what if a cafeteria worker created a way to still “salt” a product or their farm created a method by which you could raise a pig that does not adversely impact a human’s health. This would become an extremely valuable intellectual property that could be commercialized into a company that the school had an ownership stake in or licensing it out to major food companies and receiving royalties the way the University of Florida does with Gatorade to this very day.

Second, campuses need an intellectual property czar and department. Yes, create a position whose only job it is to promote, oversee, and help develop intellectual property. Their job would be to help ease the process, especially for the likes of students and staff who may not be as familiar with the process as professors, but even with professors helping ease the burden of the process would go a long way. The czar and department would be charged with identifying potential customers and creating commercial relationships where the intellectual property maybe of value. They would also assist in bringing in intellectual help if an idea is being developed but the technology or expertise to bring it to bear is not available on the campus. Perhaps, a relationship with a local software company or factory lends itself to the completion of the patent or intellectual property. Also finding opportunities where intellectual focus can financially benefit the school. An example of this would be the X Prize Foundation, where in 1996 for instance a businessman and entrepreneur offered a $10 million prize to the first privately financed team that could build and fly a three-passenger vehicle 100 kilometers into space twice within two weeks. Participating in these not only has potential financial benefits, but also raises the profile of the institution.

Thirdly, community and alumni access. Allowing the use of this broadens the probability that ideas and opportunities will come to the schools themselves and serve as a potential repository. Imagine for instance had Tuskegee been setup in such a way that when Lonnie Johnson, the Tuskegee alum who invented the Super Soaker, was able to come back to the school, use some of its resources, get assistance, etc. in exchange for a percentage of future or potential royalties. In 2013, he was awarded almost $75 million alone in royalties from Hasbro. An amount that is well over half of Tuskegee’s assumed endowment. Community access would also include summer camps to engage K-12 children in thinking as problem solvers. In other words, also developing the pipeline of intellectual property creators of tomorrow is integral.

Lastly, alumni must donate to create time for this all to be possible. How many HBCU professors can sit on campus for a semester, not teach, and simply focus on research? Very few, if any. How many students could stay on campus over the summer and experiment? Again, very few, if any. In fact, one of the primary problems that HBCU campuses have over summers is shutting down facilities in an effort to save money instead of opening them up for use to their professors, staff, students, and even the community. Those summer camps for K-12, which can lead to future HBCU students. Again, they need support and funds. Alumni must supply the funds to keep the lights on. Summertime is not a time to shutdown, but a time to have an opportunity to do the out of the box things that perhaps the semester schedules bog down. That can not happen without a targeted focus and strategic giving by alumni.

Patents, intellectual property, and the financial benefits that come with them currently are largely aligned with some of the nation’s largest endowments should come to no surprise to anyone who follows higher education finance. The top five producing patent colleges and universities between 1969-2012 (2018 endowment rank in parentheses), University of California (12) has 7,488 patents, MIT (6) has 4,017 patents, Stanford University (4) has 2,403 patents, CIT (34) has 2,365 patents, and the University of Texas (3) has 2,321 patents. In fact, these five schools have a combined endowment value of $51.5 billion as of 2018. Is there primary revenue from patents? Certainly not, but is the money insignificant? Also, certainly not. For HBCUs though, it could be life saving.

Even the way we engage this process may need to be outside of the normal box. For a lot of schools, even with alumni support, it maybe difficult to implement a program like this. However, one solution could be that the five HBCU conferences take the lead to allow for scale and best use of resources or HBCUs partner with other HBCUs and create a IP consortium and they profit-share. Stronger together. However it has to come together, it must. The financial future of HBCUs is rooted in becoming the problem solvers of today and tomorrow. It is time we focus, harness, and unleash the brilliant minds that constitute our institutions. Our bodies were used to build wealth for others for centuries, it is time to let our minds be the slingshot to our own (financial) freedom.

*Bowie State University was awarded its first patent in 2018.

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HBCU Money™ Presents: 2016-2017’s Private HBCU Presidents By Salary/Compensation


HBCU Money’s inaugural gathering of presidential salaries at the nation’s private HBCUs.

HIGHLIGHTS

  • Out of 570 reported private college & universities presidential salaries’ from American colleges & universities, 58 (or 10 percent) earned more than $1 million annually in compensation.
  • America’s top 5 paid private university presidents’ compensation ($16.7 million) is almost six times greater than the top 5 paid private HBCU university presidents’ ($3.07 million) on our list.
  • 8 of the 11 private HBCUs present have graduate/professional programs.

Wayne Frederick Howard University – $1,049,522

Norman Francis* Xavier University (LA) – $631,883

William Harvey Hampton University – $539,384

Beverly Tatum* Spelman College – $446,334

David Carlisle Charles Drew University (Medical) – $429,302

John Wilson Morehouse College – $424,519

Edison Jackson Bethune-Cookman University – $409,823

Carlton Brown* Clark Atlanta University – $389,995

Brian Johnson Tuskegee University – $335,000

Ronald Carter Johnson C. Smith University – $261,899

Walter Kimbrough Dillard University – $238,125

Ronald Johnson* Clark Atlanta University – $234,701

C. Reynold Verret Xavier University (LA) – $194,154

Mary Campbell* – Spelman College – $191,126

*Partial-year compensation

Source: The Chronicle of Higher Education

Locked Out: HBCUs Only Receive 3 Of The 460 Donations Of $1 Million Plus To Colleges In 2017


If charity is any economic indicator, then wealthy donors have retrenched their nervousness about the economy as a whole. Two years ago, $1 million dollar plus donations to colleges and universities were under 500 such charitable gifts for the first time since 2012. Last year, that was reversed to almost 600, but the reversal was not to be sustained in 2017 where once again less than 500 donations – only 460 to be exact were of the $1 million dollar plus variety to colleges and universities. The largest donation made its way to UC-San Francisco to the tune of $500 million by the Hellen Miller Foundation whose source of wealth stems from real estate. For perspective, this donation is an amount equal to twenty-five percent of all HBCU endowments combined.

For HBCUs, the trend has been a constant struggle to get back to 2014 when nine such donations were made to our institutions. Since that time, not more than five have occurred in a given year in the past three years and this year marks the lowest number with only three donations of $1 million plus. That HBCUs can not even garner three percent (the number that HBCUs represent as a total of all American colleges and universities) marks a continued challenge in the financial arms race that is happening among higher education institutions as the shifting landscape of the 21st century unfolds. Without the transformative donations, HBCUs remain reliant on tuition revenue and at risk in competing for talent both among faculty, students, research, and infrastructure. What is the solution to this philanthropic Rubik Cube? As with most problems, there is more than one solution, but there is no doubt those solutions need to come fast and soon.

If you need perspective on just how large the gap is between the largest donations to HWCU/PWIs and HBCUs is – the top three PWI donations totaled $969 million. In contrast, HBCUs top three donations totaled $3.7 million, an amount that is 262 times less.

1. Orlando L. Clark (pictured above) – $1.59 Million
Recipient: Tuskegee University
Source of Wealth: Health care

2. Antonio Clayton – $1.1 Million
Recipient: Southern U. System Foundation
Source of Wealth: Law

3. George & Jill Hamilton – $1 Million                                                        Recipient: North Carolina Central University
Source of Wealth: Chemicals

Source: The Center for Philanthropy

 

HBCU Money™ Presents: The George W. Carver 2015’s Top 20 HBCU Research Institutions


HBCUs continue to go backwards in the research field according to the latest National Science Foundation data. In 2014, research expenditures for the top 20 HBCUs combined for $445.4 million, while 2015 combines for $425.7 million. This represents a 4.4 percent drop year over year and 5.5 percent drop from two years ago.

  • The top ranked HBCU is Howard University at 197 and the twentieth ranked Xavier University of Louisiana is listed at 326 in America’s college research landscape.
  • MEAC maintains the way with eight schools versus the SWAC dropping to three after Alcorn State University gave way to XUL.
  • Division II/III schools also comprise four schools on the list, an increase from two in 2014.
  • 1890 HBCUs, land-grant universities, make up for seven of the twenty top HBCU research universities.

Rank. HBCU. Previous Year In Parentheses.

  1. Howard University – $47.3 million ($40.7M)
  2. Florida A&M University – $46.5 million ($46.4M)
  3. North Carolina A&T State Univ. – $35.2 million ($35.0M)
  4. Morehouse School of Medicine – $33.4 million ($41.9M)
  5. Alabama A&M University – $29.2 million ($29.5M)
  6. Tuskegee University – $25.7 million ($24.9M)
  7. Jackson State University – $23.9 million ($26.6M)
  8. University of the Virgin Islands – $20.6 million ($20.4M)
  9. Tennessee State University – $20.0 million ($20.1M)
  10. Delaware State University – $16.0 million ($17.7M)
  11. Hampton University – $14.9 million ($11.2M)
  12. Charles Drew University of Medicine – $14.1 million ($20.7M)
  13. Meharry Medical College – $14.0 million ($19.0M)
  14. Fayetteville State University – $13.7 million ($14.7M)
  15. Morgan State University – $13.6 million ($15.7M)
  16. Prairie View A&M University – $13.1 million ($12.3M)
  17. South Carolina State University – $12.6 million ($12.7M)
  18. North Carolina Central University – $12.4 million ($11.5M)
  19. Clark Atlanta University – $9.9 million ($9.2M)
  20. Xavier University of LA. – $9.6 million ($9.3M)

TOP 20 COMBINED TOTAL: $425.7 million ($445.4 million)

Additional Notes

The HWCU-HBCU gap for research among top 20 research institutions is 50:1

Top 20 HWCUs Combined: $21.1 billion ($23.2 billion)

Top 20 Average HWCU – $1.1 billion vs. Top 20 Average HBCU – $21.3 million

Top 20 Median HWCUs – $990 million vs. Top 20 Median HBCU – $15.5 million

Source: National Science Foundation

2017 National Real Estate Preview: HBCU Alumni Real Estate Agents Look Ahead To The New Year


An HBCU alumna and ally who are now prominent real estate agents sit down and talk with us about what to potentially expect for the year ahead in the real estate market covering coast to coast.

Tiffany Curry (top left) – A Texas Southern University alumna who now works for Berkshire Hathaway Home Services Anderson Properties in Houston, TX.

Kimberly C. Lehman (top right) – An HBCU ally who is married to a Hampton graduate and now owns and runs KC Lehman Realty as a division of John Aaroe Group in Los Angeles, CA.

What do you believe the rate hike in December by the Federal Reserve may do to the coming year of real estate?

TC: I believe the rate spike will motivate buyers that have been on the fence. I think people will fear the rates may continue to rise and that we will see an increase in buyers purchasing homes. Rents are at record highs. It is still less expensive to own vs. lease.

KC: If the interest rates rise in the way we expect, it will impact how much buyers currently in the market can afford. As such, home values should level out, but many buyers will continue to be priced out.

Tell us something that makes you optimistic and pessimistic about the 2017 real estate market?

TC: I’m excited that the 2017 market has already shown positive signs of movement. I currently have clients who are ready to sell and purchase new homes in the first quarter of 2017. I expect my business to double in the 2017 year which is remarkable in the current marketplace. Consumers are seeing value in homeownership and are trading their homes for more space or better locations.

KC:  Optimistic: In Southern California, there is no shortage of buyers, and therefore opportunities for business continues to grow. If values level out, that might balance out the supply and demand which also equals more opportunities for business.

Pessimistic: Uncertainty of our new administration has sellers that ordinarily would sell right now holding tight. Also current home values will cause some buyers who are unwilling to compromise on property location and/or condition to drop out of the game.

Where do you see the most opportunity for real estate investors in your market for 2017?

TC:  In Houston, we have a diverse and growing economy. I see development as an excellent place for investors. Land purchases should be key for investors as the Houston population will nearly double by 2040. Land will become scarce and is a great opportunity for someone that can buy and hold.

KC: Southeast Los Angeles if they are smart. They missed the boat on Inglewood.

Companies like Redfin, Zillow, and others are disrupting the traditional real estate market. How are you seeing their presence influence the real estate market?

TC: Houston is a rare marketplace where we have our own local consumer public facing website, har.com. HAR.com is the only site in the US where Zillow, Realtor.com and others do not hold prominent market share. This has enabled brokers and agents in the market to maintain their presence without the need for an outside third party. Redfin however has come into the marketplace as they offer a discount service. Consumers who want to save on commissions are using their services however it is in line with the traditional discount brokerages that would have attracted this type of consumer. Although they are capturing consumers they still are a very small impact in our local market as most consumers still want the guidance and expertise of a REALTOR that has time to handle their needs rather than one that is focused on transactions.

KC: Buyers and sellers are relying on these sites to educate them about the real estate process and home values. As it relates to the latter, none of these sites are truly accurate. Redfin in particular has gotten their own market share of listings and buyers through their site and their agents are in direct competition with those of us at traditional brokerages. They aren’t always knowledgeable of the areas they are tied to via the site. I’ve heard horror stories!

On the upside, Zillow reviews are liquid gold to agents in the field.

Since reaching its all-time high of 49.1 percent in 2004, African American homeownership has now fallen to an all-time low of 41.1 percent as of third quarter 2016, an almost 20 percent decline. What do you believe can be done in the foreseeable future to reengage the African American consumer?

TC: I believe the African American consumer must be reeducated on the value of homeownership. Homeownership for most Americans is their primary source of wealth and assets. I believe our communities, churches and social groups must put more emphasis on the value of owning the land beneath your feet. As one of the largest groups in consumer spending we must do a better job of prioritizing what we spend our monies on. Material items that depreciate are not the key to wealth. Laying the foundation to a solid financial future for our children and their children’s children are what we must focus on. Building and maintaining our communities by owning what is in them is key.

KC: African Americans need to pool resources in order to compete with the current buyers in the market. Often, our community looks to FHA, NACA, CALHFA and other government programs to help us – but unless we are shopping in low income areas, we can’t compete with the cash offers elsewhere. If we work together and create real estate investment groups we can began to establish potential generational wealth for our heirs.

Thank you for participating ladies and we look forward to your 2018 forecast! To reach these agents please click their names to be directed to their websites.

Tiffany Curry – Houston, TX

KC Lehman  – Los Angeles, CA