April 17, 2009
HBCU Financial Forecast: Part I
The 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-boardâ€ 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,â€ 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.â€
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,â€ 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.â€
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,â€ 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.â€
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,â€ 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.â€
Next in the series: HBCU Students Seek More Avenues for Funding