Tag Archives: wealth gap

Building Wealth In College: 6 Personal Financial Tips Before You Blow Your HBCU Refund

By William A. Foster, IV

“There are two types of (people) in this world; there are those with guns and the ones with butter. The guns; that’s the real estate, the stocks and bonds, artwork that appreciates with value. The “butta”; cars, clothes, jewelry that don’t mean shit after you buy it.” – Melvin (Baby Boy)

When I arrived at my HBCU many years ago, two decades ago now, it was true before, it was true then, and it is true now – you know on an HBCU campus when refund checks have been disbursed. New wardrobes show up and fashion shows commence across campus, “new” used cars show up with rims and sound systems, and in some cases trips to Jamaica for spring break are coordinated. A full range of African American consumerism is in full bloom. The problem of course is that majority of these refunds are part of a financial aid package that largely includes student loans. This means students are being handed thousands of dollars (with no financial aptitude) that will in their future life turn into tens of thousands of dollars of student loan debt to pay back. But Jamaica will be fun, right? Or in the words of the classic philosopher Riley Freeman (of the Boondocks) after blowing the food money their granddad left them “Now before you start hating, ask yourself – be honest, ain’t I clean though?”

The ripple effect is acute to put it kindly. HBCUs, although significantly cheaper, often find their students graduating with more student loan debt than their counterparts. A result of poor endowments, lack of family resources, and again, poor financial aptitude. Student loan debt, even more so than credit cards, maybe the easiest debt for a college student to obtain. It is also the cheapest unsecured debt that most of us will ever see or have access too in our lifetime – and there is the rub. There is good debt and bad debt. As simple as it can be put, good debt helps you acquire assets that generate income. Bad debt does not. Again, good debt, if used properly helps you acquire assets that can in turn pay off the debt and once paid off continue to pay you passive income. The best example of this I ever witnessed was a classmate of mine who had a part-time job while in school was using his refunds as down payments on rental properties buying one or two a year. By the time we graduated he owned 5-6 rental properties that were all cash flowing. Those rental properties will pay for the mortgages AND his student loans. Eventually leaving him with rental income and appreciation from the properties. Meaning when he takes that trip to Jamaica he could really afford it.

A few things to think about before we get into our tips. Upon graduation, do you expect for someone to give you $10,000 or more dollars? Upon graduation, how will you come up with the deposit for your first apartment? Upon graduation, will you have an emergency fund or savings of any sort? For most HBCU students, there is a resounding no to probably all of those questions, which is why refunds should be treated as close to an “inheritance” as most of us will ever see. If we are smart about it, this will give us the foundation to build transformative wealth.


TIP 1: Learn to say NO. Say no to yourself, to your friends, and for a lot of HBCU students – your family. The last part being the hardest for some. It is a poorly kept secret on a lot of HBCU campuses that a lot of students send portions of their refund checks  home to help their families. Unfortunately, their families are not likely to be helping them pay their student loans after graduation. Without learning to say no you are likely to succumb to your own consumer desires, friends or classmates peer pressure, and families dependency. Just like when flying, put your mask on first. In other words, make sure you establish your financial foundation before overextending yourself to help others. Financial security and stability should be a paramount concern. If you are unsure what that means, always ask yourself this question as you build wealth – if something happened and you could never work again – how long would you be financially okay?

TIP 2: Call a financial advisor and open a brokerage account. There is a misconception that that financial advisers are for the wealthy. This is simply not true. They are for whoever is willing to use them and the earlier you acquire one the more likely you are to make a long-term plan for wealth creation. Remember, you building wealth is in their best interest. If you need help finding a financial advisor, do your homework. There are vultures out there like in any occupation, but there are quality people in the profession as well. This is one time where Google is indeed your friend. A great place to also go – your HBCU’s business school. Just to understand what this has the potential for in the short-term. Imagine your refund is $2,000 a year and we will use the prior five year returns of the S&P 500. The returns on the $2,000 invested each August over the past five years would be worth $14,020 today. Which means the student would have increased their assets by 40 percent with a student loan interest rate that has been under 5 percent for over a decade. There are however downside risk and that should be explained to you by the financial advisor. If they do not explain this, fire them immediately and find a new one.

TIP 3: The financial advisor can help you with this one as well, but it is a specific type of account. Opening a Roth IRA. It is another type of brokerage account, but the difference is you will not have access to the money until you reach the ripe retirement age of 65. The beauty of this account though is you will never pay taxes on the money earned in it. Retirement is often something that African American are ghastly unprepared for financially. If you contributed $2,000 a year to the account during your five years in college and graduated at 22 you would have $10,000 in your account. If invested in the market, which has a historical annual return of 12 percent, and you simply contributed $50 a month going forward for the next 43 years that would give you at the age of 65 over $2 million tax-free.

TIP 4:  Open a CD ladder at your bank or credit union. Every year when you get your refund, go to your bank (preferably a Black Owned Bank) and open a certificate of deposit (CD). Your freshmen year get a four year CD, sophomore year get a three year CD, junior year a two year CD, and so on. Assuming you are getting a minimum of $2,000 in refunds per year and it takes you like many students these days five years to graduate, when you walk across the stage you will have $10,000 to start off in the world with. This will not have the same impact as the previous tip, but is more for those who are a bit more risk averse. While you may not increase your assets by 40 percent, there is also no chance of you losing any of the $10,000 either. If you are not familiar with CD ladders, call your bank, visit the library, Google, and of course as always – your HBCU’s business school.

TIP 5: Start a business. When I was in undergraduate, I wanted to open up a jazz club, but learned very quickly and harshly that nobody wants to lend to just a good idea. Banks, the SBA, and others expected you to have some skin in the captain also known as a down payment of capital. It is also unlikely that you will be able to call home and have family fund your amazing idea. Often times, your refund can serve as the seed capital for your business. Remember, Michael Dell founded Dell Computers in his dorm room. You do not need to be a business major to start a business. You need an idea. It certainly is prudent to visit your HBCU’s business school and ask for guidance on things like setting up the proper paperwork. While there, you may have recruit an accounting student as your CFO and a marketing major as your CMO. Some HBCUs actually house the region’s Small Business Center that is funded by the SBA and they have a lot of free resources at your disposal to help you get on your way.

TIP 6: Create a real estate partnership. Believe it or not, there is still a lot of valuable real estate that is available to be purchased in and around HBCUs. It also protects HBCU communities from gentrification that we have and are seeing around HBCUs like Howard, Texas Southern, Prairie View, and others. If you can find three other like-minded class mates who are all willing to contribute their refunds that would be $8,000 a year and $40,000 by the time of graduation which would give the group buying power of $200,000 worth of real estate. Be it a single-family, duplex, or other kind of rental property. Your refunds could be the start of a real estate empire that in turn would pay off all of you and your classmates student loans and build wealth over the years. Definitely do your homework on this one. Take a real estate class from a reputable place, speak with a local real estate investor who maybe open to mentoring, and of course see what resources your HBCU business school has on the topic.

In the end, whatever you choose to do with your refund, make sure it counts. Remember, this is still debt – whether it becomes good debt or bad debt is ultimately up to you. Getting more financially educated whether you receive a little refund, a big refund, or no refund is vitally important for all HBCU students and their futures.



The Greatest Financial Literacy Video Ever (According To Our Editor)

“A wise person should have money in their head, but not in their heart.” – Jonathan Swift

By William A. Foster, IV

Anyone who knows me and has talked to me about money has been sent this video. As a financier who has been asked for personal finance help by family and friends along with once upon a time being a former adjunct professor whose primary job was to teach a prism of subjects for incoming freshmen at a local community college throughout the course, one of those being financial literacy, finding this video was like stumbling upon treasure.

Dan Griffin, CPA, in one hour could honestly change your financial life if you listen, take notes, and put into action everything he discusses. I have watched more financial literacy videos than I can count and this is hands down the best. It is not smoke and mirrors, nor him trying to sign you up for anything, or any of the quite frankly pompousness that I tend to come across with this new era of financial literacy experts that have cropped up as a niche industry. Are there credible people out there trying to teach financial literacy? Absolutely. Is it getting harder and harder to figure who is genuine and who is a pimp turned pastor turned financial advisor? Definitely. Dan Griffin’s video is the most basic financial “meal” imaginable, meat and potatoes. His voice throughout is never too high or low, but simply steady. Moving from one subject on the financial menu to the next and explaining them in depth while giving you additional information to look up on your own. Quite frankly, I have yet to see anyone come remotely close to this one hour.

If the wealth gap for African Americans is to be closed both individual and institutionally, then it starts with improving our basic financial literacy and that is what this video does. As a bonus, we have also added how you can legally get to a point where you are paying no federal taxes.

Jay-Z’s Billionaire Ascension Highlights The Black-White Billionaire Wealth Gap In America

“I want to inspire people. I want someone to look at me and say “Because of you I didn’t give up.” – Reginald F. Lewis

Forbes Magazine recently declared that Shawn Carter AKA Jay-Z AKA Hova officially has the net worth to enter billionaire status. We wonder if there will be a follow-up to 50 Cent’s I Get Money song that was remixed and called the Billionaire Remix or Forbes 1-2-3 where Jay-Z, Diddy, and 50 Cent who at the time were worth a combined $1 billion between the three of them. Now, Jay-Z can do the song all by himself. Unfortunately, while social media celebrated Mr. Carter’s new found billionaire status, it does open up an additional layer to the conversation on the racial wealth gap in America. Of course, no one who is a billionaire is going to garner sympathy from Main Street America, but the lack of African American billionaires certainly can be argued as a point of why there is continued institutional weakness among Main Street African America.

African Americans make up 15 percent of the American population, but of the Forbes 400 wealthiest Americans there are only three who make the cut – Mr. Carter is not one of those three. This amounts to less than 1 percent representation. According to the website, “The minimum net worth to join this exclusive club hit an all-time high of $2.1 billion while the average net worth for a Forbes 400 member rose half a billion to a record $7.2 billion.” The only three African Americans present on the Forbes 400 are Robert Smith, who recently made headlines by promising to pay off all of Morehouse’s 2019 class student loan debt. Then there is David Steward, a man who could walk into almost every room in African America and would not be recognized, but has made his $3 billion fortune through co-founding an information technology firm that is integrated in the highest levels of corporate and government. Lastly, Oprah Winfrey, who ironically is not even the wealthiest HBCU graduate but is the wealthiest African American HBCU graduate. It would take 60 African American billionaires with a net worth exceeding $2.1 billion to be representative according to our population’s percentage. Overall, there were 680 billionaires in the United States in 2018 and only four of those at the time were African American, Michael Jordan being the fourth who is also a recently minted billionaire and also is a case study in himself of just how astonishing the wealth gap is among African American and European American billionaires, but more on that later. The irony of representation for African Americans is that the United States in 2018 comprised almost 25 percent of the world’s billionaires despite being less than 5 percent of the global population according to Wealth-X.

In 2014, the median wealth for African America stood at $9,590 versus $130,800 for European Americans, according to the U.S. Census Bureau. This means that for every $1 that African Americans have European Americans have approximately $14. This in itself is an astonishing number until you examine the gap among the billionaire class. The five wealthiest European Americans (Bezos, Gates, Buffett, Zuckerberg, & Ellison) have a combined net worth of $427.7 billion versus $13.4 billion for our billionaire five of Smith, Steward, Winfrey, Jordan, and Carter. It is a ratio of the aforementioned having $31 to every $1 of the latter, which is almost 2.5 times greater than the overall gap. For the gap to be progressively worse as the wealth goes higher is in some ways astonishing and in a lot of ways expected because of how the wealth is being created. Re-enter, Michael Jordan.

There is the man who built Nike and the man who owns Nike and they are not the same. Very few will argue that had Michael Jeffrey Jordan not signed with Nike in 1984 the company, founded and majority owned by Phil Knight, probably never becomes more than a two-bit player behind the likes of Adidas, Reebok, and New Balance. Jordan was a paradigm shift. The financial gods aligned the stars in 1984 for Phil Knight with the signing of the man who would become arguably the greatest NBA player of all-time, the NBA’s continued meteoric rise in popularity, cable television, and ESPN. All of these ingredients came together to take Nike from a company that in 1984 was doing $867 million in revenue to the behemoth that it is 35 years later with revenues of $36.4 billion. An increase of 4200 percent over the time period. Jordan’s brand accounts for almost 10 percent of the company’s revenues today despite Jordan himself not having played in the NBA for almost 20 years. No other brand comes close to the singular importance that Jordan still holds for Nike, and therefore Phil Knight. Yet, Knight’s net worth is almost $34 billion, while Jordan’s is only $1.9 billion. Ultimately, Jordan who earns around $100 million annually from Nike or 3.2 percent of the Jordan brand revenues is simply well compensated labor, while Knight, the owner, truly reaps the fruits of His Airness.

Consequences of these gaps is not unnoticed institutionally within communities. Billionaires tend to be major donors to institutions like education, healthcare, and more philanthropically. These are areas of institutional infrastructure for African America that are severely under built and underfunded.  Never mind the investments they make in the order of private equity or venture capital that spawns new generations of wealth and influence, which tends to lead into immense political influence in the form of political contributions that shapes policies for hundreds of millions. Phil Knight has contributed well over $2 billion to his former alma maters, the University of Oregon and Stanford Graduate School of Business,  an amount equal to the value of all 100 plus HBCU endowments combined. He has so much influence that the state of Oregon has changed laws just to accommodate his giving to the University of Oregon.

Unfortunately, coming back to one of Jay-Z’s most prolific lyrics tells a lot of the issues facing African American wealth accumulation where he says “I’m not a businessman, I’m a business, man.” For many this line is interpreted as Mr. Carter braggadocios that he is bigger than just being Phil Knight, he is Nike – and he is right and that is where he is also wrong. Instead of controlling the company and brand, he is the company and brand. In other words, if he does not work, then he does not eat in a sense. Many of Mr. Carter’s businesses are built on their relationship to him. They are what is considered a lifestyle brand and he is the lifestyle brand you aspire to be. You drink his liquor or wear his clothes because this allows you to share in his coolness. For his business to continue to produce, then he himself must remain relevant. Three of the five African American billionaires have made their money via sports/entertainment and mainly off their own image, while four of the five European American billionaires have built their companies via technology and scaled those businesses to something that the entire world wants and needs. Even Mr. Buffett, who has largely made his money through investments and lords over companies like Geico, Wells Fargo, and many other companies is so integrated into people’s lives, often in ways they do not even realize on a day-to-day basis. Their companies and brands are far more well known to the world than the founders themselves. Governments buy Microsoft software. In fact, Microsoft Windows still accounts for use on almost 80 percent of the computers worldwide. They have created systemic companies, while our billionaires have created mostly popularity brands and as we know popularity eventually fades as new generations arise. The fact that Mr. Carter has remained relevant this long is a testament to him for sure (and his wife), but not something anyone should assume can last a lifetime. There is also the reality that even if it does, he can not pass his social capital along to his children, but Jeff Bezos’ children can and will most likely inherit Amazon even if they choose to not run it.

The situation is also not isolated to African America. Worldwide, the sons and daughters of Africa are battling the same fate. Asia is experiencing a meteoric rise in their billionaire class and now trails only Europe/US with the Diaspora with the most billionaires. Africa, one of the world’s fastest growing economies, has less than 2 percent of the world’s billionaires but contains over 15 percent of the world’s population – mainly, due to Asian and European interest continuing to siphon the continent of resources and burden it with predatory debt to their own interest and benefit. Simply put, we are not going to sing, dance, or chase balls in closing the wealth or power gap overall or the gap in the pantheons of the two. We are going to have to build institutions that wield wealth and power on a mass scale not just in small silos. Mr. Carter and Jamie Dimon are financially worth roughly the same, but Mr. Dimon is the CEO/Chairman of J.P. Morgan bank that controls almost $3 trillion in assets. An amount that is 600 times all African American owned banks combined. Mr. Dimon is not a business, man. He is “just” a businessman.

A multilayered cake is what the wealth gap entails like so many other issues that African America is looking for solutions to as a community. This data ultimately just gives us another layer to examine to help level the playing field. Mr. Carter’s billionaire status while admirable also should raise pertinent strategic questions for the community in its economic development. How is African American wealth being created? Is it scalable? Is it replicable? Are we seeing the wealth circulated back within the our community’s institutions? The reality of what it means that the gap at the apex of wealth is so pronounced must be examined and what it can tell us is still to be determined, but we do know that while men lie, women lie, numbers do not.

The 20 Year Review: 1996 & 2016 HBCU Endowments Then & Now


The 2016 HBCU Money’s Top 10 HBCU Endowments list is out. NACUBO’s list this year included 815 reporting institutions from the U.S. and Canada. Here are a few fast facts of then and now in regards to HBCUs place in the whole of the endowment conversation.

  • Of the 815 reporting institutions in 2016, only 1.8 percent were HBCUs. HBCUs comprise 3 percent of American colleges and universities. In 1996, Of the 467 reporting institutions in 1994, only 0.8 percent were HBCUs.
  • 20 years ago, the 4 HBCUs who were present on the list had a combined endowment value of $468.2 million versus the top 4 HWCUs who had a combined endowment value of $23.8 billion.
  • The endowment wealth gap between the top HWCUs/HBCUs in 2016 was 101:1. In 1996, it was 51:1.
  • In 1996, 20 HWCUs reported endowments over $1 billion and 3 HBCUs reported endowments over $100 million. In 2016, there were 93 HWCUs with reported endowments over $1 billion or an increase of 365 percent. HBCUs increased their ranks of $100 million endowments from 2 to 5 or an increase of 150 percent – unchanged from the 1994 to 2014 review.
  • The 101:1 gap currently is actually a decrease from our 2014 review where the gap was 106:1. A significant 4.7 percent decrease.
  • Of the 805 within the United States, 74.3 percent of the $515 billion in endowment value is controlled by 11.3 percent or 91 institutions.
  • The favorite investment of endowments above $100 million is alternative strategies*, which for endowments above $1 billion make up 58 percent, between $501 million to $1 billion make up 45 percent, and endowments $101 million to $500 million constitute 35 percent of their portfolio.
  • While the majority of HBCUs fall well under the $100 million sphere, the favorite investment among those groups are domestic equities, constituting in the range of 33 to 44 percent of portfolios under $100 million.

*Alternative strategies are categorized in the NCSE as follows: Private equity (LBOs, mezzanine, M&A funds, and international private equity); Marketable alternative strategies (hedge funds, absolute return, market neutral, long/short, 130/30, and event-driven and derivatives); Venture capital; Private equity real-estate (non-campus); Energy and natural resources (oil, gas, timber, commodities and managed futures); and Distressed debt. On-campus real estate is included in the Short-term Securities/Cash/Other category.

Are African American Churches Derailing African America’s Economic Progress?

“You know our people, they want their leaders to be prosperous. One hand washes the other.” – Brother Baines (character from Malcolm X)


Recently in Third Ward, an area rich with historic significance to the city’s African American population there was a battle being engaged between the neighborhood of Oak Manor University Woods and their “neighbor” Wheeler Avenue Baptist Church. WABC had already purchased one entire street of forty some homes in the neighborhood and was in the process of expanding once again as its membership had swelled. The church for all intentions appears on its way to becoming one of Houston’s mega-churches. For Oak Manor University Woods, they seemed to be getting closed in on all sides. The current president of the Oak Manor University Woods Civic Club Bettie Patterson said, “I thought the University of Houston would be our albatross, not Wheeler Avenue.” She was referring to the University of Houston’s presence in Third Ward, which itself has spurred a great deal of the rise in gentrification in the area as the school’s profile as a tier one university has attracted a lot of redevelopment in the area. Many homes in the neighborhood on the tax roles see their lots valued for more than the actual homes themselves. Inside Houston’s Inner Loop, land and affordable housing have become something of an oxymoron. Houston, the fourth largest city in the United States, has been booming with high oil prices spurring most of that boom. Unfortunately, African Americans inside the loop have been the primary victims of that boom. Sitting on what has been historically underdeveloped and depressed land and neighborhoods, many developers (or churches) come in and offer many African American home and landowners under market value prices to scoop up the land. Most lack the financial aptitude or savviness to deal with these fast talking developers or churchmen claiming to be doing God’s work and end up selling their land and homes. In the aftermath, they are not able to afford to stay in their community or forced to sell as taxes have skyrocketed due to rising values and payments they can not maintain, with many of the community’s senior citizens on fixed income. In the Oak Manor University Woods and Wheeler Avenue Baptist case, where the church could be working with the neighborhood to build affordable housing, it is instead engaged in battle that will eventually lead to over sixty homes being demolished and over 200 potential African Americans not in the area. The irony, those 200 may drive from some distance to attend the church and after church if they intend to eat or do any shopping, virtually none of the stores will be owned by African Americans in the area or community. It appears we have pushed all of our chips in on the church, and if it can not save us, then we do not want to be saved.

In some ways, I feel sorry for the African American church. It is essentially being asked to be everything institutionally in the development cycle for African America. Every institution whether it is a neighborhood, church, bank, lobbying group, etc. falls under one of three institutional categories of social, economic, or political. The SEP cycle of development follows that exact order in fact. Social institutional development comes first, then economic institutional development, and lastly political institutional development. A church, by its very nature, is suppose to be a social institution. It is a place where social norms and cultural capital is circulated amongst a community. Other social institutions are things like families, neighborhoods, and schools. All circulating a particular a set of norms and values. Economic institutions are businesses, investors, and even banks. The latter has the unique charge of helping circulate capital and exporting financial risk from the community that owns it onto other communities. An acute problem African Americans experience with predatory financial services from institutions like Wells Fargo who just settled for $175 million with the Department of Justice for its predatory behavior with African Americans. Political institution examples are political parties, lobbyist, and PACs. The institutional cycle always follows the same pattern. Currently, the black church though is being asked to be all three. A feat that no institution can pull off. College and universities are social institutions that often serve the needs of economic and political institutional development through their research, but ultimately are still social institutions. The last I checked, there is no research being conducted in the halls of black churches.

Yet, African America has put all of its stock into this institution and starving the independent development of a strong economic and political institutional development. Although many churches are profitable like businesses, they often lack the serious institutional infrastructure or aptitude to operate as such. Last year, HBCU Money’s first ever African American Credit Union Directory in 2014 uncovered some startling findings about the church’s role in African America’s economic institutional landscape. Religious affiliated credit union make up 5.6 percent of US credit unions, while African American religious affiliated credit unions comprise approximately one-third of all African American credit unions and almost one-fourth of all US religious affiliated credit unions. In California, all seven African American credit unions in 2014 were religious affiliated. The sensible thing for them to do would have been if they absolutely had to form their own (as opposed to banking at an African American owned bank or credit union) was for all seven to form one and call it the “Insert famous African-American religious figure from California” of California Federal Credit Union. It would have been a credit union with seven branches, 1 485 members, and $1.7 million in assets. Instead, the median membership and assets among the seven separately was 152 and $165 000, respectively. In other words, not worth the paperwork it probably took to form them and likely limited opportunity for any real scalability or sustainability.


It is both a gift and curse that one-third of African American credit unions are religious based. The gift is that any opportunity for African Americans that increases financial engagement is a benefit. The Center for American Progress reports, “For African Americans, the unbanked rate declined slightly from 21.4 percent in 2011 to 20.5 percent in 2013, and the underbanked rate decreased from 33.9 percent to 33.1 percent.” Nationally, the figure for unbanked and underbanked was 7.7 percent and 20 percent, respectively. Having more financial institution options is a good thing. The presence of credit unions, be they religious or not, in African America decreases the probability of predatory financial services like payday loans that are often prevalent in our community coming in to fill the void. However, the problem for having such a disproportionate amount of credit unions being religious based is that these credit unions have no ability to scale as the aforementioned example in California showed, which further means they are limited in the types and number of financial services and products they can offer. The reality is that churches are not equipped to be financial institutions and religious based credit unions are limited to the size of their congregation to their growth potential. They also tend to lack the intellectual expertise to grow and perform the functions that provide for stability of operation for their members and the communities they are in. Often times, these religious based credit unions come across as nothing more than the ability for the church to control more of and keep an eye on the congregation’s purse strings to make sure they are getting their cut. This is problematic after reporting two African American banks closed their doors to start 2015, thereby reducing the number of African American banks to twenty-three. A far cry from the 1990s, when there were over fifty African American owned banks.

African American churches are also siphoning off much needed capital from other institutions within the community where capital is vitally needed. Recently, an example of this was shared by Jarrett Carter, Sr. in an editorial for HBCU Digest where he shared, “Last year, I gave more than $10,000 to my church, $1,500 to Alpha Phi Alpha Fraternity Inc., and $150 dollars to my alma mater.” In a 1987 study by Emmett Carson for Joint Center for Political Studies reported, “Over two-thirds (68 percent) of all dollars that are contributed by blacks to charity go to the church.” A figure at the time that was higher than the national average of 46.9 percent. It is hard to imagine that although the study is almost thirty years old that much has changed given the disclosure by Mr. Carter. Some may argue that it has in fact gotten worse. Unfortunately, such a disproportionate amount being given to churches with our limited income leaves little for investment in the rest of African America’s institutions. Over the past 100 years African American owned hospitals have decreased from 500 to 1, African American boarding schools have decreased from 100 to 4, the institutional gap in HWCU/HBCU endowments has grown from 46:1 to 106:1 over the past 20 years, HWCU/HBCU research expenditures gap is 30:1, Harlem and countless other African American communities have been gentrified, and the wealth gap among all other groups (except Native Americans) and African Americans continues to severely widen. Yet, the African American church continues to be a booming industry. As a result we see even the African American non-religous based credit unions and banks anchoring their “business” products to churches.

Let me be clear, I am not against the African American church. It has been a vital institution in our community. Its history and place in our communities is important, but it can not and should not be asked to solve all of our problems. A religious institution is there to be part of our community’s social institutional fabric, but it is not there to enrich and strengthen us economically or politically. Each institution in a community has a purpose and function. None more important than the other and all are needed. The acute investment that African America has put into its churches though has created a situation where all others starve and this has created an ongoing crisis that is on the brink of disaster. Church based credit unions are not setup to make small business loans, which are vitally needed to created more African American businesses and create jobs in our communities. They are not setup to decide which STEM and humanities research should be given grants that can one day be turned into private application or help shape policy, and nor should they be. That is not what their purpose is or ever was intended to be.


Overall, church attendance in America is declining (above) and has been for the past sixty years, and as is often the case we are behind the curve of change. This despite African American men and Millennials being one of the fastest declining groups in church attendance. African American men are almost twice as likely as African American women to not attend church. Financially, this is not so much of an issue for the church, since African American women lead virtually in every economic category. African America is the only group where the women outnumber the men in employment and are predominantly head of households. The irony if there is any, is that the vast majority of African American churches are still headed by men, but that is another article for another time. African American women hold the proverbial purse strings and they are in the church.

If African America is to ever progress economically, then it needs a lesson in portfolio diversification also known as do not put all your eggs in one basket, one stock, or one institution. Right now, we are overweight in church “stock”. For which I can already hear the rebuttal of, “You can never be to overweight in the Lord!”, but I did not say overweight in your spirituality. I said overweight in the church, and one does not beget the other despite how much we try to convince ourselves otherwise. In an interview on HBCU Digest by the aforementioned Jarrett Carter, I was asked if African America was culturally adverse to economies of scale and I believed then and I believe now that the answer is a resounding no. However, I also remember hearing Tavis Smiley speak once and he said there is a difference between hope and optimism. Hope much like faith does not have to be grounded in anything, but optimism has to be grounded in facts that show a favorable trend. I am hoping for some reason to be optimistic about our economic progress soon, but that will not happen until we decrease what we give and expect from our churches and increase investment into our other institutions, like our banks and credit unions, that are built to serve the purpose of our economic progress. I better pray.