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.
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.
“Great things in business are never done by one person. They’re done by a team of people.” – Steve Jobs
It is a business story worthy of Hollywood. Mainly because it seems to be a storyline that you only find in movies. However, the story is very real and very powerful. Not only because of its potential, but also because of the possibilities that it presents. Three HBCUpreneurs from three different HBCUs start a business, but have never actually met each other in person. The power of the internet, the power of Twitter and most importantly, the power of the HBCU community.
The company, HBCU Real Estate, is an internet services company that seeks to help the HBCU community (but not limited too) find and use HBCU real estate service providers. Everything from real estate agents, mortgage brokers, interior designers, and more. The founders hope that it will even lead to business creation in the spaces of real estate that the HBCU community may have little to no presence. HBCU Money is aware of only one title company* owned by an HBCU alumnus. HBCU Real Estate’s mission is to help facilitate circulation of the HBCU community’s dollars and keep them in the HBCU community. If successful, it could potentially keep tens of billions of dollars within the HBCU community. The fact that none of the founders have ever met in person makes what they are trying to accomplish even more astounding.
For two years it sat on the proverbial shelf according to organizer, cofounder, and HBCU Real Estate’s Director of Product Development, William A. Foster, IV, a Livingstone College, Virginia State University, and Prairie View A&M University alumnus. “I am a multipreneur and have learned that more hands and brains on deck is almost always a good thing. I needed to meet and find the right people who could understand, compliment, add value, and who could see the potential just as much as I could. Also, I promised myself no more solo projects. When you are involved in as many businesses and organizations as I am, being able to spread the load is vital to success – and sanity.”
Enter Christen Turner, Spelman College and Southern University alumnus, and Marcus King, an alumnus of Prairie View A&M University, both HBCUpreneurs themselves. Ms. Turner, HBCU Real Estate’s Chief Technology Officer, also owns Janelle T. Designs, a graphic designs firm, as well as Forever Femme, an accessories company. Mr. King, HBCU Real Estate’s Chief Marketing Officer, owns Hardly Home, a clothing line that is catered towards travel that was featured on HBCU Money’s The HBCUpreneur Corner in 2015. What does it say to you (King) about the potential of collaboration for HBCUpreneurs that 5 different HBCUs are represented among the 3 cofounders? King answered, “The motto at my alma maters is that “PV produces productive people” and I think that can be said about HBCUs across the board. For years HBCUs have been producing top talent and should continue to do so as we seek to move forward and provide solutions to the problems our community faces.”
The three have followed each other on Twitter for years, although no one can remember for how long. It was towards the end of 2020 that Foster said he approached Turner and King about doing a collaboration or tweeted at them rather. “I sent out a tweet and tagged both of them saying that I need to cofound something with the two of them. Having watched them over the years I knew we would click and have the same kind of work ethic. I just needed to find out if they thought the idea had any legs. If it was not this, it was going to be something else.” The work ethic was confirmed when he said he got an email from Turner on Thanksgiving while he himself was working. Turner further drove the point home of the potential of the moment, “This business will be successful because of two reasons, respect and trust. Despite not having met in an ‘official’ capacity, our partnership seems to have a natural fit to it; almost like pieces of a puzzle. With William’s intuition, he was able to unknowingly add the right people to his team who would each be able to add something different. Whether from a professional standpoint or specific personality traits, we all came in with an immediate respect for each other’s talents and skills. This is why the business will be successful. There’s no questioning; there’s only action, openness, and honesty.” Usually in Hollywood the movie ends with and they lived happily ever after – The End, but in this case it is clear that this is just The Beginning.
The adjective that best describes 2019 HBCU endowments – uninspiring. HBCU flagship endowments barely moved over the past calendar year. Of all reporting endowments, only The University of the Virgin Islands saw double digit gains in their endowment market value. Since breaking into the top 10 HBCU endowments in 2014, UVI has been on a meteoric rise almost doubling their endowment over the past six years and has become something of a canary in a coal mine.
There is plenty of blame to go around, but the jest of the matter is HBCUs and HBCU alumni associations continue to not do a good enough job of hammering financial and philanthropic literacy among their constituents. This leads to either a lack of investing or no investing at all among HBCU alumni and HBCU alumni associations and therefore a paltry engagement both from an alumni giving rate and alumni giving amounts. Simply put, there are still far too many HBCU alumni and students who do not know what an endowment is or its purpose and it is reflected in the endowments of our institutions.
If there is any solace to be taken from this year’s numbers, it is that HBCU endowments are largely in line with the overall sentiment of America’s college and university endowments. Unfortunately, the median HBCU endowment is less than 44 percent of the overall NACUBO median reporting endowment and HBCU endowments are just barely 18 percent of the NACUBO average reporting endowment.
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 