The Big Business of HBCUs

Historically Black Colleges and Universities enroll less than 20 percent of black undergraduates but award one third of all bachelor degrees to black graduates. HBCUs also educate one-out-of-three black lawyers, half of all black engineers, two-thirds of black physicians and eight-out-of-ten black judges and teachers.

With those kinds of numbers, one would think that alumni donations would be pouring into these schools.

That’s not happening.

“We have to draw a distinction between a graduate and an alumnus…there is a distinct difference,” said Leonard Haynes, executive director for the White House Initiative on Historically Black Colleges and Universities.

“If you graduate, that’s important but once you give back to your alma mater you are making a positive contribution to the university,” said Haynes.

“We are not drumming the point home that even if you put it on your resume, have a diploma hanging up at your parents’ house that says you are an alumni, you are not an alumni until you give back.”

Haynes, a 1968 history graduate of Southern University in Baton Rouge, La., said he created a legacy of HBCU attendees in his family.

“All my kids went to HBCU’s,” he said. “I told them there are 103 HBCU’s so they should pick one because that’s what I am paying for.”

David Gibson, 25, is one HBCU grad who is proud and giving back.

Since relocating to the Washington, D.C. area, the 2007 MBA graduate, has talked to high school students about his experience at FAMU. He was on campus for the career fair this week recruiting for his federal agency.

Gibson agrees that a lot of young alumni do not give back like they should. He said sometimes they have a good reason for being stingy.

” You can’t have your hand out the entire time asking for money, when you have slapped around the students while they were here,” he said. “Sadly, this has been a pattern for most HBCU’s, where they do not have the best customer service when it comes to serving the students.”

When alumni don’t give, it means the university has a smaller endowment.

Endowments, a fund of cash and other assets accumulated from private and corporate donations, are a school’s investment engine and key element of its image.

Ample endowments generate unprecedented opportunities for a university to invest in new buildings, create infrastructure, increase faculty salaries and hires, expand scholarships, and reduce dependence on tuition. Universities with adequate resources can ride out recessions or economic downturns.

According to Carla Willis, vice president of development for FAMU, the 2007 National Association of College and University Business Officers endowment ranking of 785 colleges and universities that responded to their survey, included 11 HBCU’s. The lowest HBCU was ranked 747 out of 785 respondents.

Howard University was in the top 150 at no. 138 with $524 million; Spelman College was in the top 200 at no. 189 with $340 million; Hampton University was in the top 250 at no. 223 with $257 million; and Meharry Medical College was in the top 500 at no. 433 with $78 million.

FAMU’s endowment, with permanently restricted net assets, reaches $77.6 million.

Despite innovative methods to increase their endowments, many HBCU’s are struggling.

Harris-Stowe State College, Congresswoman Maxine Waters alma mater, has an endowment of less than $1 million. Jerry Rice’s, Mississippi Valley State University, has an endowment of $2 million. Medgar Evers College, located in Brooklyn’s Bedford-Stuyvesant community, the host of the National Black Writers Conference, has an endowment of only $60,000.

Money problems force many black students to drop out of college, and small endowments restrict the amount of financial aid historically black institutions can offer prospective students. Spelman College’s endowment is worth over $100,000 per student, making it the highest endowment per student of HBCUs. However, Grinnell College in Iowa, a predominantly white institution similar in size to Spelman, boasts a financial endowment over $1 billion.

“Limited resources, history of racism and segregation and the neglect of support by the public sector are the many reasons why you see numbers like these,” said Haynes.

“Harvard gets more research dollars than all the black colleges combined; we have not received full support on national and local levels.”

According to the data from National Science Foundation, six of the top 20 predominately White universities received more federal funds for research than 79 HBCUs combined.

Despite a calculated record of success at educating black scientists and engineers, HBCUs continue receiving disproportionately fewer federal dollars.

“On October 2007, the National Science Foundation presented North Carolina A & T State University in Greensboro, N.C. with $40 million for research,” said Haynes. “The largest in history for any HBCU,” he said.

“We’ve come a long way, but we are not there yet.”