HBCU Financial Forecast: Part I - Black Enterprise
Black Enterprise Magazine January-March 2019 Issue

hsbc2The country’s economic quagmire has reached far beyond Wall Street to the hallowed halls of academe. Take for example recent news that Harvard University is planning “across-the-board” budget cuts. If the Ivy League school, which has a $36.9 billion endowment, is in trouble, imagine the situation at minority-serving institutions, whose endowments are a small fraction of Harvard’s.

Lezli Baskerville, president of the National Association for Equal Opportunity, which lobbies on behalf of the 103 public, private, two-year, and four-year historically black colleges and universities suggests that the federal government bail out HBCUs in the same way that they rescued AIG, IndyMac, and Goldman Sachs.

“At no time have HBCUs had endowments and access to public or private resources comparable to those of their white counterparts,” Baskerville says. “Our institutions have far fewer resources to begin with. Despite our very best efforts, our institutions are not getting a fair share of public resources of research dollars or public technical assistance dollars.”

Many agree with her, and believe that Troubled Assets Relief Program (TARP) funds used to keep financial services institutions from going under should also be used for HBCUs. There are at least eight colleges and universities that are in dire financial circumstances and in need of an immediate infusion of capital to remain viable, according to a letter that Baskerville wrote to Congress in the early stages of stimulus planning.

Traditionally white institutions are suffering as well. Drew Gilpin Faust, Harvard’s president, expects that the Harvard Endowment will lose 30% of its value by the end of fiscal year 2009. She also plans to trim 10% to 15% of its budget and increase tuition by 3.6% for the 2010 academic year. In comparison, Spelman College, which tops Black Enterprise’s Top 50 Colleges for African Americans list and has a $351 million endowment, will eliminate 12 vacant and 23 existing positions and restructure its education department.

“Nobody has the endowments that they had a year ago. Everybody’s endowments have been hit pretty hard,” says Michael Lomax, president of the United Negro College Fund, which collects charitable giving for 39 private HBCUs. “This is going to be a hard period to grow endowments.”

A large percentage of HBCUs don’t have endowments at all. Spelman is just one of only three HBCUs with an endowment of more than $200 million. “If you don’t have an endowment, then operating costs are more expensive,” says Sid Credle, dean of the business school at Hampton University, No. 4 on the Top 50 Colleges list. “There will be a decrease in scholarships, which will have an effect on enrollments at smaller HBCUs.”

Enrollment is down at Fisk University, ranked No. 8 on the Top 50 Colleges list, by 11% and donations are lagging last year’s rate by more than 40%. Fisk announced that the school would be reducing its expenditures by 15%.

Clark Atlanta University, No. 13 on the Top 50 Colleges list, cut 70 professors and 30 full-time staff in February and will receive $428,000 for facilities and equipment. This money came from $238 million in earmarks, which was attached to the stimulus package and allotted to 22 HBCUs, Hispanic-serving institutions, and tribal colleges, collectively known as minority-serving institutions.

Although grateful for these funds, advocates of HBCUs say that more is needed, considering that minority-serving institutions graduate a disproportionate amount of the country’s diverse workforce.

HBCUs are continually ranked among the top schools in the nation. Black Enterprise Magazine’s Top 50 Colleges for African Americans placed four HBCUs in the top five positions. Harvard was ranked No.10.

HBCUs represent only 3% of all colleges and universities, yet they enroll 16% of all African Americans in 4-year, degree-granting institutions. They graduate a large percentage of African Americans with degrees in engineering, sciences, technology, mathematics, and the health sciences, according to Baskerville.

“The nation has to recognize the browning and blackening of the country and recognize the critical role that HBCUs play in producing students,” Baskerville says. “If we are talking about remaining or becoming an eminent technological society, we’ve got to educate the growing populations of the nation; which are Latinos and African Americans.”

Next in the series: HBCU Students Seek More Avenues for Funding

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.

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