HBCU Money, a website profiling financial news and information on historically Black colleges and universities, this week released its annual report on the top 10 endowments at HBCUs in 2013. Howard University topped the list with more than $513 million in its endowment, despite a drop of more than $20 million from last year’s list.
The list, which also accounts for return on investment for the top 10 endowments, posts North Carolina A&T State University as the HBCU with the highest yield with 17. 5 percent. William Foster, Publisher and Editor of HBCU Money, says that graduation rates are a short-term factor in the long-term building of Black college endowments.
“The demographics are working against us because we have the lowest graduation rates in this country,” says Foster, a graduate of Virginia State University and Prairie View A&M University. “This matter is at the heart of our financial issue. Larger alumni pools increase the probability of producing high-quality donors or those who can make transformative donations.”
The movement for more diverse student bodies at HBCUs, he says, also hinders brand loyalty in African-American communities for HBCUs – a critical element to philanthropic support of HBCU missions and students. Howard, he says, would require a $6 billion endowment for all of its students to attend debt-free, but currently operates at less than 10 percent of that threshold.
“There is also an issue of HBCUs operating in isolation from the overall African-American ecosystem. Many argue that we need to get more “diverse” because demographics are working against us. But I have yet to identify an HBCU whose endowment is managed by an African-American owned asset manager or bank. That is an issue that has caused questionable returns at one of the top ten endowments.”
“So like many other African-American institutions with failing health, a significant part of the problem is that they are too detached from the ecosystem and no institutions in an ecosystem can operation in isolation and survive.”
The top ten endowments are (Return on Investment in Parentheses):
1. Howard University
$513 667 (11.5%)
2. Spelman College
$327 171 (5.8%)
3. Hampton University
$254 103 (9.3%)
4. Meharry Medical College
$124 965 (11.1%)
5. Florida A&M University
$115 281 (7.0%)
6. Tennessee State University
$42 970 (13.4%)
7. Texas Southern University
$42 179 (11.1%)
8. Virginia State University
$38 192 (15.3%)
9. North Carolina A&T State University
$32, 959 (17.5%)
10. Winston-Salem State University
$29 543 (13.8%)
According to Foster, data used for the list and retrieved from the National Association for College and University Business Officers suggests that the top ten endowments of predominantly white colleges equals $154.7 billion, while the combined value of the top 10 HBCU endowments equals $1.5 billion.