“Hope, But Not Success.” Foundations Dug Deep for HBCUs in 2020, but Funding Gap Far From Closed

A little over two years ago, I made the claim that giving to historically Black colleges and universities (HBCUs) had finally gone mainstream. Looking back, I may have been overly optimistic, caught up in the moment despite my past frustration with philanthropy’s tepid pre-2020 support for HBCUs. Along with many other commentators who were bullish about such giving, I really wanted big-ticket giving to HBCUs to go mainstream.

Even so, it was also impossible to deny that the mood in the room had changed. Major donors who had never supported HBCUs announced major gifts or blew past previous levels of funding. Corporations, which tend to be philanthropy’s late adopters, were even making big pledges. And over the course of 2020, the United Negro College Fund attracted 100,000 new donors and boosted its fundraising haul by over 400%.

While the evidence was anecdotal, it seemed as if the calls for racial justice that arose after the murder of George Floyd compelled funders to acknowledge the integral and centuries-old role of HBCUs in the Black community.

A new report from Candid and Association of Black Foundation Executives (ABFE) suggests there was good cause for both optimism and pessimism. In 2019, large private foundations gave HBCUs an underwhelming $45 million, not adjusted for inflation — a 31% decrease over 2002. A preliminary examination of grant data harvested from news stories indicates that foundation support for HBCUs in 2020 totaled a whopping $249 million. This isn’t an apples-to-apples comparison since the figure isn’t based on IRS data, but it nonetheless suggests that foundations stepped up to counter years of chronic underinvestment in a big way.

The critical question is whether this momentum carried into 2021 and beyond. Critical because, as the report also points out, the 2015–2019 baseline of foundation support for HBCUs was shockingly low relative to peers. Among other findings, “The average Ivy League institution received 178 times more foundation funding than the average HBCU. Ivy League schools received a combined $5.5 billion in philanthropic dollars compared to HBCUs’ $303 million,” the report found.

I reached out to Candid’s Senior Director of Insights Cathleen Clerkin and ABFE President and CEO Susan Taylor Batten to discuss the report and the post-2020 landscape, and they told me that based on their qualitative observations, foundation interest has, in fact, waned. “2020 has shown us that there’s hope that philanthropy can be transformative for HBCUs,” Clerkin said. “I see it as a story of hope, but not success. At least not yet.”

Persistent underfunding

Culled from a quantitative analysis of 18 years of funding data to 103 HBCUs and interviews with HBCU staff, funders and students, the Candid/ABFE study is probably the most robust look at foundation funding for HBCUs ever published. The research focused on independent, community, operational and family foundations, and did not include giving from public charities or individuals like MacKenzie Scott who do not give through a foundation (Scott did make some big gifts to HBCUs in 2020). “We wanted this report to focus on the relationship between foundations and HBCUs,” Clerkin said.

The report looks at foundation giving from 2015–2019, and while I’d like to think the 2020-era surge will hold and render the earlier data moot, it’s still important to examine where the scant support came from and the huge funding gaps between HBCUs compared to predominantly white institutions (PWIs).

From 2015 to 2019, independent foundations accounted for 66% of grant dollars, followed by corporate and community foundations at 21% and 12%, respectively. Among the 1,607 foundations that supported HBCUs, the median aggregate dollar amount awarded was $11,000 and the median number of institutions supported was one.

The top 10 foundation backers of HBCUs from 2015–2019 were as follows:

The Duke Endowment: $33 million
The Mellon Foundation: $17 million
The Coca-Cola Foundation: $17 million
Verizon Foundation: $13 million
Lilly Endowment: $13 million
The Wallace Foundation: $11 million
Bill & Melinda Gates Foundation: $10 million
W.K. Kellogg Foundation: $8 million
Silicon Valley Community Foundation: $5 million
The Chicago Community Trust: $4 million

Clerkin noted that the figures from the two community foundations at the bottom of the list mostly likely represented a mix of discretionary foundation giving and grants from DAFs, which are a proxy for individual giving.

Explaining the gap

One of the most shocking data points of the report is that foundations gave Ivy League schools a combined $5.5 billion between 2015 and 2019, compared to only $303 million for HBCUs. I was especially struck by the fact that the disparity showed up in all types of foundations in Candid’s data set, including private legacy foundations with professional staff and governance. Shouldn’t their trustees and program officers know better?

For Batten, these disparities reflect the broader “giving gap to institutions and organizations that are focused on Black communities. That is something we have to acknowledge.” This gap often emerges when foundations lack strong relationships with HBCUs. Batten attributes this, in part, to a lack of diversity among foundation staff, who, just like individual donors, may feel a pull to their PWI alma mater instead of an HBCU. “Lived experience matters, in terms of designing programs and moving money to institutions and organizations,” Batten said. “People give money to people who they know, right?”

Batten also pointed to the issue of funder bias as it relates to “the perceived value of HBCUs.” The report picks up on this theme, noting that researchers have documented “how traditional markers of legitimacy — e.g., graduation rates, standardized test scores or endowment size — disadvantage Black higher education institutions.” The unfortunate irony is that funders’ obsession with “traditional markers of legitimacy” obscures the fact that HBCUs outperform PWIs and Ivies when it comes to boosting graduates’ economic mobility — a metric that should resonate with foundations concerned with equity and opportunity.

HBCUs also provide “real opportunities for funders who are interested in not only education, but economic and community development,” Batten said. “We’re hoping to get more funders to understand that the role of these institutions goes beyond educating Black professionals; they facilitate community change all across the country.”

Funders’ myopic perception of “value” often translates into a lack of trust. Candid found that foundations awarded proportionately fewer grant dollars as general operating support to HBCUs compared to Ivy League and similarly situated institutions.

“The energy is starting to wane”

The report concludes with a set of recommendations laying out how foundations can “demonstrate greater commitment to building equity for HBCUs and Black communities.” Most obviously, foundation leaders need to make support for HBCUs a permanent fixture in their portfolios in the same way that alumni reliably shovel millions to their affluent alma maters. “It’s on the foundations to get to know Black institutions and understand the issues facing Black communities,” Batten said.

The report also found that not every dollar is equal. HBCU leaders told Candid that in order to generate maximal impact, foundations should earmark support for infrastructure, personnel and scholarships, and provide unrestricted funding.

All of which brings me back to the blockbuster 2020 data. Beyond the startling $249 million figure — which, again, Candid gauged by analyzing news stories instead of IRS data — I was also encouraged by the fact that of the 303 foundations that made grants to HBCUs since 2020, 27% were not represented in the data set from 2015 to 2019. This suggests that these foundations either gave to HBCUs for the first time or restarted giving after a four-year hiatus.

But as I spoke to Batten and Clerkin, I couldn’t shake a lingering sense of unease. Back in 2020, it seemed like not a day went by when I didn’t come across gifts from funders as varied as the Community Foundation of Greater Memphis, investor Seth Klarman and TikTok. Two years later, my Google Alert is eerily quiet. And so the old adage, “Don’t ask the question if you’re not prepared to hear the answer,” loomed large when I asked the pair if they sensed a shift in momentum post-2020.

“I hate this question, Mike,” an exasperated Batten said. “We haven’t done a rigorous study, but we are hearing from members on the foundation and nonprofit side, and there is a waning of interest — ‘George Floyd fatigue.’” Clerkin said she and her team were hearing similar concerns. “Some of the HBCUs that we talked to for the qualitative part of our research did say that the energy is starting to wane,” she said. “I want to keep an eye on the data to see if it plays out, but we often feel it before we see it.”

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