“Things Will Only Get Tougher.” With HBCUs on the Brink, Will More Funders Step Up?

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In a recent piece in The Conversation looking at the disproportionately adverse impact of the pandemic on historically black colleges and universities (HBCUs), Marybeth Gasman, professor of education at Rutgers University, and Gregory Price, professor of economics at the University of New Orleans, were asked if these schools could “rely on private philanthropy during this emergency.”

“No,” Gasman responded emphatically. “Some big donors and foundations give to HBCUs, but not in a way that will help them survive the crisis.” Price was slightly less fatalistic. “Probably not,” he said, as “philanthropy targeted at HBCUs continues to lag significantly behind other schools.”

About a month later, HBCUs received two pieces of good news. On May 14, the Andrew W. Mellon Foundation announced $1.76 million in COVID-19 emergency grants to 16 HBCUs, including Virginia’s Hampton University, which netted $100,000. A few days later, Hampton University President Dr. William R. Harvey and his wife Norma matched Mellon’s gift. “The financial impact that the coronavirus pandemic is having on our Hampton students causes me great concern,” Harvey said. “It is truly important for us to be supportive during the greatest health and economic crisis in our lifetime.”

And in late May, the Oprah Winfrey Charitable Foundation announced that Tennessee State University received $2 million as part of the foundation’s $12 million COVID-19 Relief Fund.

All three gifts provide critical lifelines to HBCUs that faced profound financial challenges before COVID-19 struck. Unfortunately, they also proved Gasman and Price’s point. The Department of Education’s National Center for Education Statistics found that HBCUs received more than $320 million in private gifts and grants during the 2015-16 academic year, the two most recent years of information available. This figure represented a 20% increase over the previous two years. But it also accounted for a mere .78% of the record $41 billion raised by American universities in 2016.

Last month, the Department of Education allocated $1.4 billion in relief funding specifically to institutions serving minority populations, including HBCUs. But Gasman argues it still won’t be enough. “In my view, the federal government could and should support a stimulus package for HBCUs to help them through this dire time,” she said.

Pre-Crisis Liabilities

At the most fundamental level, HBCUs and predominantly white institutions (PWIs) face the same set of challenges in the age of COVID. Both types of schools are grappling with revenue loss, increased expenses incurred from shifting to online learning, and the threat of reduced private support, as many donors have shifted their attention to organizations on the front lines of COVID-19 response.

However, as the Washington Post’s Valerie Strauss notes, HBCUs “are likely to get hit especially hard. These schools have long struggled for sufficient resources despite being an important part of the higher education world in this country, and now things will only get tougher.”

HBCUs’ pre-crisis struggle for resources took on many forms. HBCU endowments lag behind those of non-HBCUs by at least 70%, a report by the American Council on Education found last year, forcing them to rely on tuition revenue to cover costs. And as Gasman notes, “with few exceptions, HBCUs have rarely gotten large donations. When institutions have a long history of being underfunded, they can’t build the same foundations as those that do.”

COVID-19 has magnified cracks in HBCUs’ foundations. Ivory Toldson, professor of counseling psychology at Howard University, said that “HBCUs might see worse effects because they have less money to begin with.” Moreover, Toldson said that HBCUs “do not have the technical capacity to deliver quality online classes.” HBCUs also serve a high percentage of low-income students, many of whom may not return in the fall. “If the coronavirus continues to keep their dorms empty,” the University of New Orleans’ Price said, “the revenue shock from the pandemic could conceivably” cause some schools to close their doors.

A Lack of Philanthropic Support

HBCUs’ outlook would be far less precarious with a strong philanthropic footprint. And yet, in 2019, the top seven predominantly or historically white colleges landed $2.94 billion in donations, versus just $43 million for the nation’s 100 or so HBCUs. How can we explain this disconnect?

For starters, HBCUs lack a deep bench of the kind of affluent alumni that make huge gifts to their Ivy League and public university alma maters. HBCU alumni have less money to give. As Gasman notes, the average African American family has roughly $5,888 in assets compared to the average white family’s $88,000. Nor have HBCUs been successful in securing large philanthropic gifts from non-alumni. “There’s racism involved in acquiring funds,” Gasman said. In the past, “funders did not trust African Americans to manage their money, so they didn’t give.”

Similarly, non-alumni donors may be reluctant to support HBCUs that have a six-year degree-completion rate of 32 percent, according to a recent report from the Education Trust, compared with a 45 percent rate for black students at all kinds of institutions. But these findings, said Ray Franke, an assistant professor of higher education at the University of Massachusetts at Boston, don’t take into account systemic differences between students, like socioeconomic status or institutional disparities in revenues and wealth.

Another challenge is that with relatively small asset bases, HBCUs can’t gain access to the kinds of investment strategies available to schools with multibillion-dollar endowments. “Wealth begets wealth,” Gasman said. “This is the same thing that happens with HBCUs.”

“The Precipice of the Renaissance”

Despite these obstacles, advocates argued that funders focused on racial equity, student access, STEM education and social mobility would warm up to HBCUs. And so a particularly cruel irony behind HBCUs’ current troubles is that prior to the pandemic, advocates began to see their hopes finally materialize.

In 2018, Ronda Stryker and William Johnston made a $30 million gift to Atlanta’s Spelman College. Prior to the gift, the largest commitment ever made to an HBCU was Bill Cosby’s $20 million gift to Spelman in 1998. At the end of the year, the Atlanta Journal-Constitution’s Eric Stirgus reported that “from individual contributions by alumnae… to celebrities like Beyoncé giving scholarships to students and signing big checks, there’s an upsurge in support and donations to the nation’s HBCUs.”

Stirgus attributed this success to equity-minded donors’ concerns “amid national conversations about racially charged issues such as deadly police encounters with African-Americans” and HBCUs’ improvements in fundraising.

The gifts kept coming in 2019. In May, Robert F. Smith pledged to pay off approximately $40 million in student loans for Morehouse College’s graduating class. Five months later, the school netted a $13 million donation from Oprah Winfrey. Former Papa John’s CEO John Schnatter gave $1 million to Kentucky’s Simmons College, UnitedHealth Group announced an $8.25 million partnership with the Atlanta University Center Consortium to launch a data science initiative, Jackson State University received $450,000 from the Mellon Foundation to expand the capacity of its Civil Rights Education Center, and North Carolina’s Bennett College raised $10 million to prove it was financially stable enough to keep its accreditation.

In November of 2019, large institutional funders announced gifts earmarked for faculty development at HBCUs. The Mellon Foundation gave Texas’ Prairie View College $1 million, Spelman College received $500,000 each from the Carnegie Corporation of New York and the Rockefeller Foundation, and Morehouse received $1 million from Carnegie. The Carnegie gift capped a startlingly successful year for Morehouse’s development team, which also netted a $4.6 million bequest from alumnus Eugene McGowan Jr. and $2 million from businessmen Dr. William F. Pickard and Judson W. Pickard Jr.

This year started with great promise. January saw three big gifts: NBA legend Charles Barkley gave Alabama’s Miles College $1 million‚ the largest donation in the school’s history; former American Express CEO and chairman Kenneth Chenault and his wife Kathryn donated $1 million to Morehouse College; and Howard University received $10 million from the Karsh Family Foundation to endow its STEM program.

Toward the end of the month, Lodriguez Murray, senior vice president of public policy and government affairs at UNCF, an organization that lobbies on behalf of HBCUs, spoke to Education Dive’s Natalie Schwartz about the brightening philanthropic forecast. “You’re starting to see just the precipice of the…renaissance that these institutions can undergo so that students who need this type of investment are receiving it and getting the proper outcomes they deserve,” Murray said.

Then COVID-19 hit. In mid-May, Morehouse announced it was expecting a 25% enrollment drop. President David Thomas said employees should be prepared for job losses, pay cuts and furloughs.

Throwing Lifelines

The Andrew W. Mellon Foundation and the Harveys threw HBCUs philanthropic lifelines around the same time as Thomas’ announcement. Mellon’s funding aims to help institutions stabilize enrollments for the upcoming academic year. For students, the grants “address technology needs, financial strain due to tuition or residential bills, supporting essential travel between home and campus, and other necessities.”

“HBCUs play an essential role in shaping the minds and futures of our nation’s talented young people,” said Mellon Foundation President Elizabeth Alexander. “As the COVID-19 pandemic disproportionately affects under-resourced institutions and communities of color, the Mellon Foundation is proud to provide focused support for students attending these vital historically black schools.”

A graduate of Harvard, William Harvey became the first African-American owner in the soft drink bottling industry when he and his wife Norma purchased a Pepsi-Cola Bottling Company franchise together in 1986. He has been president of Hampton University since 1978. During his tenure, the university balanced its budget and grew its endowment from $29 million to $280 million. The university’s first capital fundraising campaign in 1979 had a goal of $30 million and went on to raise $46.4 million. The school’s recent campaign had a goal of $200 million and raised $264 million.

The Harveys also “fundraise by example.” In July of 2018, the couple donated $553,000 to the school William serves for faculty and staff raises. “Our Hampton community is a family,” Harvey said at the time. “Ensuring each faculty and staff member receives what they are due is extremely important to me. We all work very hard to make Hampton University a dynamic and respected leader in higher education. With the help of everyone who gives so much to the campus, we have been able to become one of the top modest -sized institutions in the world.”

The gift brought the couple’s total giving to Hampton to $4.2 million. (As it turned out, Hampton received the identical amount, $4.2 million, from the Coronavirus Aid, Relief, and Economic Security Act.)

Causes for (Cautious) Optimism

Looking ahead, the big question facing HBCUs is the extent to which donors can replicate the encouraging level of support that began in 2019 and 2020. Unfortunately, HBCU development teams won’t find much comfort from their peers at PWIs. A survey by educational advancement firm Washburn & McGoldrick found that 43 percent of college and university fundraisers do not expect to meet their institutions’ fundraising goals this fiscal year.

That being said, HBCUs—which, as noted, enjoyed encouraging pre-crisis fundraising momentum from equity-minded donors—may benefit from changes to the higher ed funding model in a post-COVID-19 world. Costly football stadiums and four-star dorms are out; financial aid and online learning are in. HBCUs can capitalize on this emerging utilitarian mindset in the months and years ahead if these trends hold.

Back in 2013, Morehouse College President Emeritus Robert Franklin lamented HBCUs’ dearth of mega-gifts, telling Essence, “With all of the black wealth out there and the huge gifts some colleges have received from African-Americans, one would think that our institutions, also, should receive these gifts.” Fortunately, this dynamic has changed in the intervening years. While a feared economic downturn will disproportionately affect African-Americans, HBCUs should still be able to access the “black wealth” that Franklin alluded to in a post-COVID world.

In the short term, on May 18, sports and entertainment PR firm Taylor Strategy announced that it would partner with the United Negro College Fund to begin an HBCU 2020 Loan Forgiveness Program. And nonprofit organizations HBCU Heroes and Cxmmunity are hoping to raise more than $10 million to help HBCUs and underserved minority schools ramp up their online presence. Investors and partners include Twitch, Intel and JPMorgan Chase.

“It’s no secret that COVID-19 is disproportionately impacting black and brown communities,” said HBCU Heroes co-founder Tracy Pennywell. “However, few people are talking about it. That’s why we are. We can’t allow the existing educational divide to skyrocket because of the growing technology gap simply over a lack of computers and Wi-Fi. Students want to learn, but can’t if they don’t have technology.”