Amid HBCUs’ Financial Challenges, New Funding Offers Renewed Hope

In the wake of the 2023 US Supreme Court decision to strike down affirmative action and amid rising discrimination against Black academics at predominately White institutions (PWIs), renewed attention is being paid to the importance of historically Black colleges and universities (HBCUs).

Recent events have also drawn attention to the fact that HBCUs are chronically underfunded even as they play a critical role in shaping democracy. Leading up to the affirmative action decision, for instance, many HBCU leaders worried that their institutions would not have the resources and infrastructure to support the influx of students who might be impacted by the end of affirmative action.

Recent events have…drawn attention to the fact that HBCUs are chronically underfunded even as they play a critical role in shaping democracy.“States have never funded HBCUs on par with the other higher institutions,” said John Silvanus Wilson in an interview with the Harvard Edcast—the podcast for Harvard’s Graduate School of Education. Wilson, the former president of Morehouse College, previously served in the US Department of Education. He earned his bachelor’s degree at Morehouse before earning his PhD at Harvard University.

Wilson illustrated the disparity in institutional resources by noting that “on average, the 100 HBCUs raise roughly $3 to $4 million per institution all year. By contrast, Harvard, Yale, Stanford—a few others—raise $3 to $4 million per day all year.”

As Wilson noted, at the peak of Reconstruction, there were over 300 HBCUs. Now, there are just over 100. The lack of financial resources is partly why some HBCUs have struggled to stay afloat.

The Struggle of HBCUs

“On average, the 100 HBCUs raise roughly $3 to $4 million per institution all year. By contrast, Harvard, Yale, Stanford—a few others—raise $3 to $4 million a day all year.” 

Take Saint Augustine’s University in North Carolina, for example. The historic institution is the alma mater of notable figures, including Anna Julia Cooper, the educator and author who was the fourth Black woman to earn a PhD; Henry Beard Delany, the first African American Bishop of the Episcopal Church in the United States; Ralph Campbell, Jr., the first Black person to hold statewide elected office in North Carolina; and Ben Chavis, a noted civil rights leader and environmental justice activist.

Despite this legacy, Saint Augustine’s has struggled to maintain its accreditation in recent years. It is currently in an appeals process to keep its accreditation, which the Southern Association of Colleges and Schools Commission on Colleges (SACS) voted to revoke in December.

According to the disclosure statement released by SACS, one of the main reasons it voted to revoke the university’s accreditation was a lack of institutional control of finances. The same week SACS announced its decision, the university’s board of trustees fired its president, Christine Johnson McPhail, who accused the university of race and gender bias. Amid all this, students began classes remotely with a new interim president, and the university announced the appointment of a senior vice president of finance and chief operating officer.

Loss of accreditation has wide-ranging repercussions. If the university loses its appeals process, for example, students will no longer have access to federal financial aid. This outcome is particularly dire at HBCUs because they educate students who are disproportionately low-income to begin with.

It is not surprising that HBCUs have faced financial challenges—they are vastly underfunded as a result of racial politics and the general lack of support received from the federal government. Moreover, private HBCUs like Saint Augustine’s face additional challenges because they don’t have access to state funding.

Renewed Attention

Amid the difficulties Saint Augustine’s and other HBCUs face, there are efforts to help them gain more financial stability.

On January 11, the United Negro College Fund (UNCF) announced that it received a $100 million grant from Lilly Endowment Inc. to help increase endowments for HBCUs. This is the largest unrestricted private grant the organization has received in its 80-year history.

As Michael Lomax, the president of UNCF, noted during an interview with PBS, this grant can help close the extreme gap between funding for HBCUs and predominantly White institutions.

“HBCU endowments are significantly lower than their non-HBCU peers. If you add up the endowments of all 102 HBCUs, you get to about $4 billion. Harvard’s got a $50 billion endowment,” he said. Lomax noted that even among HBCUs, there is a disparity where the more prominent HBCUs—Howard University, Spelman College, and Morehouse College —tend to receive a disproportionate amount of funding.

“We’re trying to say to this country: Black colleges and their students don’t want a handout….They want someone to help them by investing in them.”Indeed, on January 18, it was announced that billionaires Ronda Stryker and William Johnston would donate $100 million to Spelman College. This is the largest single financial donation ever made to an HBCU.

To try to level the playing field across HBCUs, UNCF works to specifically fund scholarships for students attending 37 private HBCUs, among them Saint Augustine’s University. Lomax noted that to break the disproportionate funding cycle, UNCF has created a pooled endowment that will benefit all 37 schools: “We’re going out and raising the money. We just got this $100 million from Lilly, which will become the foundation for a $370 million pooled endowment.”

Lomax also pointed out that the renewed attention that HBCUs have gotten since the Supreme Court’s decision to strike down affirmative action is long overdue because they have been doing hard work for over a century and a half.

It is imperative, he noted, that more people understand the importance of funding these institutions, which educate 20 percent of all Black graduates. “We’re trying to say to this country: Black colleges and their students don’t want a handout,” Lomax said. “They want a hand up. They want someone to help them by investing in them, and then they’ll be a tremendous return on their investment.”