A few weeks ago, I wrote an article outlining the control of DRC most valuable resource, Cobalt. The article describes the practices of other nations lending to a poorer nation with terms of repayment that aren’t possible to avoid default. It’s that default that allows the developed nation to consume control over that country’s resources and become the nation's largest employer.  They form corporations in those countries to then sell the resources to the highest bidder nation or corporations. These practices are the reason a resource rich continent of Africa remains poorer than nations with less than 5 % of Africa’s resources. 

The article motivated a question from one of my readers. “Do these practices happen to American’s”? So, with great certainty I must say Yes! Let me show you how.

Harvard's Dominance and Financial Strength

Harvard university endowment bolster and astounding 50 billion dollars as of 2023. The annualized return on the endowment, since HMC’s founding, has been approximately 11% per year and the endowment was valued at $50.7 billion on June 30, 2023. In fiscal year 2023, distributions from the endowment contributed over one-third of Harvard University’s operating budget.

Harvard currently has 30,631 students enrolled and at a yearly tuition rate of $56,550. That’s a total of $1,732,183,050 annually. But at an 11% return of 50 billion, its investments earn $5,500,000,000 annually. Which means Harvard can pay for every student to attend Harvard for free 3 times over. It also means that if every student walks out that door, Harvard will have no trouble keeping its lights on. If Harvard doesn’t get the bulk of its income from tuition, is it a university or investment firm? I don’t know but what I do know is that it is a self-sufficient institution.

HBCUs Missing Ingredient

Which brings me to my point of this article. HBCU’s (historically black colleges and universities) total 107 institutions mostly in the southeastern states of America has a combine endowment of less than 5 billion dollars. That means Harvard makes more interest in a year than the total endowment of 107 HBCU’s.

But what makes Harvard so different than HBCUs?

The first thing that will come to mind will be its donors. Sure, Harvard donors are some of the richest people in the world and most have attended Harvard or are in some capacity affiliated. But that’s the point! That’s the secret formula! Harvard controls its supply chain. Think of it like making a pencil. First you have the raw materials, which are mostly wood. As it moves down the production line a piece of wood will be shaved down into No.2 pencil, leaving shaved wood chips on the ground. The wood chips are what is called the By Product. The No.2 pencil is the finished product. Those wood chips became an incidental business from making pencils. It increases the viability of your company by diversifying your income. Now if the pencil company uses a multitude of wood with the intention to sell wood chips, this is what we will call a co product. The difference being the intention.

Now take that concept and use it on a university level. The raw material is the students. The Finished products are the well-educated assets with higher earning abilities. But what might be the bi product and/or co product? The students all use google as a search engine, the students all use social media to communicate, the students all use technology to pay and clouds to store. Which it should come as no surprise that Harvard’s largest 3 stock investment positions are GOOG, META, And QQQ!

Harvard invests in the same business that its student would eventually get hired at and help create those businesses through venture capital and private equity. This way the finished product is always guaranteed a good job. Harvard is getting paid by way of vertical integration. First the raw materials, Tuition. Then By/Co product is investing in all the products in services your students will use while attending. And the finished product gets hired by one of the many businesses Harvard has invested in. Creating a closed loop production assembly line of human capital.   

Much like the issue in Democratic Republic of Congo, HBCU’s don’t control its supply chain. It gets the raw material and creates the talent, but they are little to no benefit for them post-graduation. And that’s because much like Congo, the HBCU’s doesn’t invest in its own self. And is setting itself up to be in perpetual state of need. 

The Financial Reality of HBCUs

In the academic year 2021–22, some 48,800 degrees were conferred by HBCUs: 11 percent were associate’s degrees, about two-thirds were bachelor’s degrees (67 percent), 16 percent were master’s degrees, and 6 percent were doctor’s degrees. Of the degrees conferred by HBCUs, the majority (74 percent) were conferred to Black students. Black students earned 44 percent of the 5,300 associate’s degrees, 81 percent of the 32,800 bachelor’s degrees, 70 percent of the 7,600 master’s degrees, and 61 percent of the 3,000 doctor’s degrees conferred by HBCUs in 2021–22. Black students conferred by HBCUs to Black students, more than two-thirds were conferred to female students (69 percent) (source). 

Of all the bachelor’s and master’s degrees conferred to Black students, the percentage conferred by HBCUs has decreased over time. For example, HBCUs conferred 35 percent of the bachelor’s degrees and 21 percent of the master’s degrees Black students earned in 1976–77, compared with 13 and 5 percent, respectively, in 2021–22 (source, source, source, and source). Additionally, the percentage of Black doctor’s degree recipients who received their degrees from HBCUs was lower in 2021–22 (10 percent) than in 1976–77 (14 percent) (source, source, and source). 

The total revenue for HBCUs in 2021–22 was $10.7 billion, with $1.9 billion from student tuition and fees. Total expenditure was $9.9 billion, of which $2.3 billion was spent on instruction. Instruction, including faculty salaries and benefits. 

An increase in wages for staff of 10%, coupled with a decline in tuition and fees of 10% could have the institution barely breaking even. Good news for HBCU’s because surely the government wants to support black own institutions.  

A Bleak Future for Government Support

Sixteen states have been underfunding some of their historically Black colleges for decades. The shortfall is more than $12 billion, according to an analysis from the U.S. Department of Education. And of all these states, Tennessee underfunded its HBCU land grant college more than any other state.  

But now that the government clearly understands the issue, they most certainly will help, right? Not so fast! The US government is currently running at a budget deficit. The U.S. budget deficit is how much more the federal government spends annually than it receives in revenue during that same period. According to the Congressional Budget Office (CBO), the budget deficit will rise from $1.6 trillion, or 5.6% of GDP, in fiscal year 2024 to $2.6 trillion, or 6.1% of GDP, in 2034. Meanwhile, the budget deficit in 2020 was about $3.1 trillion, the largest in U.S. history. The only way for them to avoid their own expenses, they could cut expenses but that means the HBCU’s will likely get less in that regard. Or they likely borrow which raises inflation that is an indirect blow to the same community HBCU’s serves. Because these communities down own assets that would appreciate with inflation, the wage gap widens for them every time the profit margins widen for a corporation. 

So, NO ONES COMING TO SAVE US. What must we do? 

As sorrowful, yet always rejoicing; as poor, yet making many rich; as having nothing, and yet possessing all things. 2 Corinthians 6:10 

Much like the verse above we are wealthier than we know. We are just spending a lot of time “making many rich; as having nothing, and yet possessing all things”. Like Congo, having the most sought-after commodities of the 21st century, yet is poor and making others rich but why?! Because they don’t own it! It was stolen from them and is stolen every day. But what is our excuse Black America? What do we own that we are willing to give away every day?  

Invest in Ourselves

Today’s value of the black dollar is north of 1.4 trillion. If Blacks income was a country, African Americans would be the 11th richest country in the world by GDP standards. Ahead of countries like Saudi Arabia 1.1 trillion, Turkey 1 trillion, UAE(Dubai) 415 billion, and Israel 1.3 trillion respectfully!   

We may not have 50 billion in an endowment but what we do have is nearly 5 billion. And with the help of all HBCU’s and the black community, we are going to recycle the black dollar. Another way of increasing the velocity of the dollar. Which makes everyone in the community richer. At Colonial Scrip Partners we have created a funnel of black wealth to partner with the universities and aid them on the enterprise side of black enterprises. Show them how to control their supply chain, vertically integrate its business practices, and discover the hope diamond in its back yard! You can be wealthy by helping yourself. We will teach you how! It’s not time to ask, “What can brown do for you”, but more like what brown can do for itself! Because if you don’t invest in yourself, someone else would but for the betterment of them and not you! We are at the bottom, and we don’t own much but that’s the beauty, because it’s so much we need to create to be fully developed and along the way we all will see riches.  You want to join the movement? Let's connect.