The Richest Black Colleges: Four Institutions Lead the Race for Crucial Endowment Assets

Ebony, November 1997 | Go to article overview

The Richest Black Colleges: Four Institutions Lead the Race for Crucial Endowment Assets


Four institutions lead the race for crucial endowment assets

FOR almost 100 years, the endowments of historically Black colleges were small-time affairs, consisting of a few thousand dollars conservatively deposited in savings bonds and other safe investments. But a booming stock market and a new wave of financially savvy college presidents and business officers have changed all that. As a result, the endowments of an elite group of Black colleges have skyrocketed, with three institutions--Howard, Spelman and Hampton--reporting endowments that top $100 million, and at least one other institution approaching that mark.(*)

With an endowment of $215.5 million, Howard University is the richest Black university, but it has been funded in part by the federal government. Spelman College is the richest traditional college with $156 million. Hampton University comes in third with $140 million. Morehouse College closes out the top four with $78.8 million. A second tier of Black colleges, led by Dillard University and Tuskegee University, is in the $40 million range.

In evaluating these figures, it must be remembered that the endowment is not an absolute measure of a college's economic success and that it must be considered along with other criteria, including the institution's debt load, financial management and enrollment. If we factor in the enrollment, as most financial rating agencies do, Spelman emerges as the richest historically Black institution, with an endowment of $82,148 per student, followed by Morehouse College, with $28,530 per student.

Another critical point here is that the word richest is a relative term, especially when you consider the $8.8 billion endowment of Harvard University and he $5.7 billion endowment of the University of Texas. From this standpoint, then, and from other standpoints, even "rich" Black colleges have a long way to go before achieving financial parity with White institutions.

For these and other reasons, all presidents interviewed said the fact that they have relatively large endowments does not mean that they need less money--it means, they say, that they need more money to maintain their competitive position and to ensure continued excellence in education.

Dr. Walter E. Massey, the distinguished scientist who heads Morehouse College, says "We are far from rich in terms of our needs and in comparison with the top White liberal arts colleges. We need more, not less, support from traditional money markets and from all Blacks, especially our graduates. We are preparing a major capital campaign to address these needs and to increase our endowment."

After the top four Black colleges and the second tier of institutions in the $40 million to $20 million range, the endowments of most Black colleges drop sharply into the low teens and the single-digit millions. This means, among other things, experts say, that Black colleges are divided into a handful of "haves" and a vast number of "have-nots." Thus, Black colleges are at a crossroad, with experts predicting that only Black colleges with substantial endowments will survive.

"There are forces that don't want to see Black colleges continue," says Dr. William R. Harvey, president of Hampton University. "Endowments bring about that long-term security that no one can take away from you. I honestly think that without that security, in 20 years some of us won't survive."

UNCF President Dr. William H. Gray III, Spelman President Audrey Forbes Manley and other educational leaders stress the critical importance of the endowment. Dr. Massey says, "Given the kinds of things we have to support at our institutions, one of which is financial aid to meet the cultural needs of our students, a substantial endowment will be the key to the survival of Black colleges in the next century."

Endowments are reserves of corporate and private donations universities invest to make money. …

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