Times are hard for the 107 historically Black colleges and universities. The pandemic made them even harder. Prior to the coronavirus outbreak, enrollment and endowments had dropped at HBCUs. Most were struggling financially before pandemic restrictions halted in-school studies, adding burdens on these already economically strapped educational institutions.
“Enrollments are down, which means less revenue. And at HBCUs, tuition is already often lower than at predominantly white schools,” Marketplace reported.
HBCUs tend not to take in as much in donations as predominantly white schools. Their endowments are on average 70 percent smaller than those of other schools. “It’s a big amount,” said Marybeth Gasman, who directs the Rutgers Center for Minority Serving Institutions. “And what that tells us is that they just don’t have the safety net that non-HBCUs often have.”
But despite the pandemic, ongoing protests against police brutality and systemic racism may actually boost enrollment. Studies show that after periods of racial unrest, more people apply to HBCUs, Marketplace reported.
HBCUs have been aggressively increasing their endowments and have ramped up their capital-raising efforts.
A number of HBCUs are making growth of their endowments a priority and are investing in their development offices in order to raise dollars within and outside their alumni networks, according to Keon Holmes, a managing director at investment consultant Cambridge Associates LLC, Boston.
Among 101 HBCUs in the U.S. Department of Education’s Integrated Postsecondary Education Data System, 48 schools submitted data on their endowment assets. Combined, they totaled $2.7 billion at the end of fiscal year 2017, according to Pensions & Investments reported. Private HBCUs had cumulative endowment holdings of $2.1 billion.
Here are the top 15 HBCU endowments ranked.
Howard University has the largest endowment of all the HBCUs with $692.8 million as of June 30, according to HBCU Money.
By comparison, Harvard University’s endowment is worth more than $40 billion.
About 50 money managers work on managing and increasing the endowment. The university works with minority-owned money managers “with the pedigree and capabilities to meet (its investment goals) in alignment with fund objectives,” a university spokeswoman told Pensions & Investments (P&I).
“Howard believes that minority managers can add value to the program and will continue to seek such managers in the investment process,” the spokeswoman said.
As of Dec. 31, minority firms managed 10 percent of Howard’s endowment assets.
Atlanta-based private liberal arts women’s college Spelman comes in the No. 2 slot with an endowment of $390.4 million.
Cambridge Associates acts as the endowment’s investment consultant, but the college also has an in-house endowment team. It uses 51 external investment managers.
“The Spelman endowment’s one-year net returns were 11.68 percent as of June 30, while its annualized three-year and 20-year returns were 7.55 percent and 8.75 percent, respectively,” Pensions & Investments reported.
Hampton is ranked No. 3 in HBCU endowments with an endowment of $282.5 million. The private institution landed in the No. 218 spot on the US News & World Report 2020 annual list of best colleges. Founded in 1868, its curriculum includes master’s programs in health and physics. Notable alumni include Alberta Williams King, mother of Martin Luther King Jr., and Booker T. Washington, who went on to found Tuskegee University.
Hampton’s roots go back to 1861 when freed African American Mary Peake taught a group of about 20 freed slaves under an oak tree – which became known as the Emancipation Oak – on what later became the university’s campus. In 1868, Brigadier General Samuel Armstrong opened the Hampton Normal and Agricultural Institute. The school changed its name to Hampton University in 1984.
Meharry Medical College has an endowment trove of $159.1 million. Opened 11 years after the end of the Civil War, Meharry’s founding mission was to educate African Americans “to serve the underserved.” Today, the nation’s largest private, HBCU academic health sciences center has trained thousands of health care professionals. “Three out of every four Meharrians return to urban or rural communities to serve others by providing medical or dental services,” according to its website.
This private HBCU for men attracted several major gifts recently — including $40 million from Netflix CEO Reed Hasting and his wife, Patty Quillin, who donated $120 million to be divided by Spelman, Morehouse, and the United Negro College Fund. Morehouse’s endowment sits at $145 million, Recode reported.
Florida Agricultural and Mechanical University, best known as FAMU, was founded as the State Normal College for Colored Students, and on Oct. 3, 1887, it began classes with 15 students and two instructors, according to its website. Today, FAMU has an endowment of $98.2 million and is among the tops HBCUs.
The University of the Virgin Islands, UVI, has an endowment of $71.6 million, according to HBCU Money’s 2019 rankings. The university was founded in 1962 and in 1986, it officially became an HBCU.
Public HBCU North Carolina A&T State University has an endowment of $68.4 million. It is based in Greensboro, North Carolina.
Tennessee State University has an endowment of $61.1 million, according to the latest data. The university was founded in 1912 and is the only state-funded historically Black university in Tennessee.
Founded on March 6, 1882, Virginia State University evolved to become the first U.S. fully state-supported four-year institution of higher learning for Black Americans. It currently has an endowment of $57.3 million.
Winston-Salem State University was founded as Slater Industrial Academy in 1892. It began with 25 pupils and one teacher in a one-room building. Today, it has an endowment of $49.7 million.
Founded in 1875 by a former slave, Dr. William Hooper Councill, Alabama A&M University has an endowment of $48 million.
Located in Holly Springs, Mississippi, Rust College was founded in 1866. The liberal arts college is the second-oldest private college in the state. Affiliated with the United Methodist Church, it is one of 10 HBCUs founded before 1868 that is still operating. Its endowment reached $43.4 million in 2019.
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Norfolk State University saw its endowment drop by 1 percent from $24.7 in 2018 to $24.4 in 2019, according to HBCU Money.
Fayetteville State University is a public institution that was founded in 1867. Its current endowment is $24.3 million. In U.S. News & World Report’s 2020 edition of Best Colleges is Regional Universities South, #89.