Why Are Black Colleges Struggling? And What Are Funders Doing About That?

Recent gifts by Apple and Toyota to the Thurgood Marshall College Fund and four historically black colleges and universities (HBCUs) have not only helped support students in these institutions; they have also helped highlight the financial problems plaguing many HBCUs.

Apple recently committed $40 million to the Marshall Fund to help make STEM careers more appealing to African-American students, while Toyota gave $50,000 to four Alabama HBCUs. We've reported on a number of other gifts to HBCUs over the past year. Despite this support, many HBCUs struggle financially.

Related - Three Funders Historically Black Colleges Should Know

Late last year, Reuters reported that Cheyney University, one of Pennsylvania’s state-run universities and the oldest HBCU in the nation (it was founded in 1837) was on the brink of financial insolvency and may be forced to close. Cheyney’s four-year graduation rate is just below 10 percent, and default rates on student loans are high. Student defaults, rising pension costs, and cuts in state higher education funding have contributed to Cheyney’s difficulties.

But Cheyney is not the only struggling HBCU. Since the 1970s, several HBCUs have closed their doors—all because of financial mismanagement or loss of accreditation. Further aggravating HBCUs’ finances is that they face increasing competition from predominantly white institutions to attract top African-American students. HBCUs also have much lower endowments than many predominantly white institutions. In 2013, five of the most prominent HBCUs—Howard, Spellman, Hampton, Meharry Medical College, and Florida A&M—had a combined endowment of $1.3 billion. While this is no small sum, it pales next to heavyweights such as Harvard, with its endowment of over $30 billion.

Those endowment numbers are yet another angle on a racial wealth gap which reflects a long history of economic exclusion in the United States. 

Further, no action from Washington, D.C., appears to be helping the plight of HBCUs. But before you pillory the Republican congress or the Tea Party, it is worth noting that many HBCU leaders have been underwhelmed by President Obama. The Philadelphia Tribune, one of the leading African-American newspapers, called a recent meeting between Obama and members of the Congressional Black Caucus an illustration of the president’s hostility toward HBCUs. According to some reports of the meeting, the president seemed more concerned about HBCUs’ business practices than with making federal education policy changes that could benefit these schools. The schools are concerned that credit standards under the Parent Plus Loans program make it more difficult for African-American students to secure college funding. They are also critical of the president’s proposal for free community college tuition, which they believe could kill many HBCUs. However, the plan has virtually no chance of approval by the Republican-led Congress.

Fortunately, some efforts are under way to help HBCUs. One of the more interesting is a grassroots effort to encourage more HBCU alumni to open their wallets and give back to their alma maters. In 2013, a group of recent graduates from Howard, Hampton, and Morgan State University started the Puissance Scholarship Fund, which awards a scholarship to a first-year HBCU student and raises funds for the schools’ scholarship funds and endowments. Fundraising activities so far have mainly involved social gatherings, such as a February event that brought hundreds of HBCU graduates to a lower Manhattan nightspot. Leaders of the Puissance fund want to expand their activities and hope an interest in community service among many African-American milennials will fuel HBCU giving.

HBCUs have been a part of the American higher education landscape for decades, and we applaud efforts, large and small, to help ensure their survival. In addition to new efforts such as Puissance and gifts from Apple and Toyota, retailers such as Walmart and Lowe’s have given to organizations supporting HBCU students, such as the Thurgood Marshall College Fund. In addition, the following funders have made HBCUs and organizations that serve and support their students a part of their higher education grant-making:

  • Kresge Foundation. Kresge’s programs focus on higher education access and success for historically underrepresented groups, such as African-Americans. The Strengthening Institutions program aims to help colleges and universities that serve these students, including HBCUs. Kresge grants have gone to Morehouse and Spellman colleges in Atlanta, the Southern Education Foundation and the United Negro College Fund.
  • Arthur Vining Davis Foundations. Davis sets aside a portion of its funding each year to help improve HBCUs.  Grants from this funder range in size from $25,000 to $250,000.
  • Andrew W. Mellon Foundation. Mellon operates an HBCU program for private, four-year institutions. Grants help HBCU presidents with strategic plans, resources and development for libraries, and curriclum development for faculty. In addition, the Mellon Mays Undergraduate Fellowships program strives to increase the number of faculty of color on college campuses.