Obama White House awards HBCUs, but how will the money be managed?

With smaller endowments and 50 percent lower tuition ($10,000 less than predominantly white colleges) due to the disproportionately low income populations they serve—not to mention higher dropout risks due to economic and academic reasons—HBCUs are feeling the pinch.  Reliant on government funding, these schools have been negatively impacted by recessionary budget cuts.  In 2011, the United Negro College Fund experienced a cut of more than $25 million in funding  for strengthening historically black colleges and universities.

According to a survey by the National Association of College and University Business Officers, Howard University — the best-endowed black college — ranks 132nd in the nation with a $371 million endowment.

Ohio State has an endowment of over $2 billion dollars, which is far more than twice the combined endowment of the schools of the historically black Southwestern Athletic Conference (SWAC) and Mid-Eastern Athletic Conference (MEAC).

Further, while Harvard University’s endowment is $19 billion, the combined endowment of all HBCUs is only $1.6 billion.  

Some HBCUs place their already limited endowments at risk when they fail to attack the problem of hazing-related deaths on campus.  Lawsuits related to hazing incidents can exact a high financial cost by eating into small college endowments.  In addition, hazing drives away long-term donors, ruins the school’s reputation and costs HBCUs revenue when students decide to attend another school for fear of hazing.

“Historically black colleges and universities (HBCUs) have suffered disproportionately in the current financial crisis. The difficult situations at these institutions have many causes, but they stem in large part from the commitment of HBCUs to serving disadvantaged students and from the history of underfunding and discrimination that disadvantages HBCUs themselves,” said Marybeth Gasman, associate professor of higher education in the Graduate School of Education at the University of Pennsylvania.

According to Gasman, tight budgets and low matriculation levels have caused HBCUs to take drastic steps to stay alive.  Leaders in these schools must make smart decisions, she added, and allocate more resources to faculty salaries and tenure, and student scholarships to remain competitive.  Gasman also urged black schools to avoid mission creep by focusing on providing a solid education and empowering a new generation of leaders.  Institutions, she said, must also commit resources to train faculty and staff in grant writing, including federal grants, and encourage partnerships with majority institutions.  Meanwhile, federal and state government and private donors can assist with infrastructure support to these colleges, which would attract more alumni support and build endowments.

Wilson said that HBCUs are viewed as “symbols of the past” rather than “forces for the future.”   These institutions, in his view, need solid leaders and not just managers — leaders who speak out on issues and possess a vision, are fundraising savvy, and are able to shape and grow the institution and work with a variety of stakeholders. He also suggests that HBCUs have difficulty attracting students and funding because they are invisible.  They have failed to articulate their “institutional value,” who they are and what they bring to the table, including a commitment to black excellence, a dedicated faculty and a culturally and emotionally supportive environment.  This comes at a time when, unlike 40 years ago, many black students may no longer view HBCUs as their best option.

If HBCUs are fiscally faltering, then their students are as well.  For example, of the 116 colleges and universities with a student loan default rate of 10 percent or more, 42 percent are HBCUsJarrett L. Carter of HBCUDigest.com has suggested that in order to stay afloat and increase fundraising and alumni giving during lean times, HBCUs should train all of their students in business entrepreneurship.  “But if HBCUs condition students to think as owners and not workers, the effort will yield the alumni who own property and business brands that will fund their respective alma maters, and develop the next generation of entrepreneurs that will create a golden age of self-sufficiency and unlimited growth for Black America,” Carter said.

Some HBCUs are defining themselves as “small, private liberal arts”  or “multicultural, comprehensive” colleges — in addition to their mission serving the black community — as a means of niche marketing.  Others are combating dwindling enrollment and funding shortfalls by recruiting non-African-American students.

“We know HBCUs have value and this is the ideal time to demonstrate that value. The opportunity to choose new leadership can be good and hopeful,” Wilson noted.  “The current challenges facing many HBCUs can often be traced to decades of decisions made or not made by HBCU boards. The question is: Do today’s trustees have what it takes to imagine, sift, and select leadership for a necessarily new future?”

Follow David A. Love on Twitter at @davidalove