No CrossRef data available.
Article contents
What Effect Does Being a Historically Black College/University Have on Endowments?
Some Counterfactuals and Decompositions
Published online by Cambridge University Press: 31 March 2025
Abstract
This article estimates several causal counterfactual parameters of the effect of being an Historically Black College/University (HBCU) on college/university endowment, and on the probability of a college/university failing as a function of its financial health, which is proportional to endowment. Our various counterfactual causal parameter decomposition estimates suggest that the racial distinctiveness of HBCUs causes, and can account for cumulative HBCU/non-HBCU endowment disparities between $11.5 billion and $58.9 billion for the HBCUs in our estimating sample. This is consistent with, at least in part, racial discrimination against HBCUs in philanthropic endowment contributions/gifts. With respect to failure, as HBCU status contributes to higher failure probabilities that are a function of college/university financial health, reducing the HBCU/non-HBCU endowment disparity would also enhance the ability of HBCUs to continuously exist. We suggest two public policy interventions to close the endowment disparity. First, increase the tax subsidy for contributions/gifts to HBCUs relative to non-HBCUs, as a way to incentivize more gifts to HBCUs from wealthy foundations and individuals. Secondly, to the extent that the wealth of HBCU alumni—who give back to their alma mater at higher rates than their non-HBCU peers—has been constrained due to the legacy of Slavery and discrimination, a distribution of reparations to the descendants of Black American Slaves would close Black-White wealth disparities that could translate into larger endowment contributions/gifts from HBCU alumni.
Keywords
- Type
- Article
- Information
- Copyright
- © The Author(s), 2025. Published by Cambridge University Press on behalf of Hutchins Center for African and African American Research
References
Abadie, Albert, Drukker, David, Herr, Jane Leber, and Imbens, Guido W. (2004). Implementing Matching Estimators for Average Treatment Effects in Stata. Stata Journal, 4(3): 290–311.CrossRefGoogle Scholar
Abadie, Alberto, and Imbens, Guido (2002). Simple and Bias-Corrected Matching Estimators for Average Treatment Effects. Working Paper 283, National Bureau of Economic Research, Cambridge, MA.Google Scholar
Allen, Walter Recharde, and Jewell, Joseph O. (2002). A Backward Glance Forward: Past, Present and Future Perspectives on Historically Black Colleges and Universities. Review of Higher Education, 25(3): 241–261.Google Scholar
Allen, Walter R., Jewell, Joseph O., Griffin, Kimberly A., and Wolf, De’Sha S. (2007). Historically Black Colleges and Universities: Honoring the Past, Engaging the Present, Touching the Future. Journal of Negro Education, 76(3): 263–280.Google Scholar
Amit, Raphael, Brander, James, and Zott, Christoph (1998). Why Do Venture Capital Firms Exist?: Theory and Canadian Evidence. Journal of Business Venturing, 13(6): 441–466.Google Scholar
Anderson, James D. (1997). Training the Apostles of Liberal Culture: Black Higher Education, 1900–1935. In Goodchild, Lester F. and Weschsler, Harold S. (Eds.), The History of Higher Education, 2nd edition, pp. 432–457. Boston, MA: Pearson Custom Publishing.Google Scholar
Association of Black Foundation Executives (2023). Philanthropy and HBCUs: Foundation Funding To Historically Black Colleges and Universities. New York.Google Scholar
Beer, Tanya, Patrizi, Patricia, and Coffman, Julia (2021). Holding Foundations Accountable for Equity Commitments. Foundation Review, 13(2): 64–78.CrossRefGoogle Scholar
Bevins, Frankki, Fox, Kathryn, Pinder, Duwain, Sarakatsannis, Jimmy, and Stewart, Shelby III (2021). How HBCUs Can Accelerate Black Economic Mobility. McKinsey Institute for Black Economic Mobility. New York: McKinsey & Co.Google Scholar
Blinder, Alan S. (1973). Wage Discrimination: Reduced Form and Structural Estimates. Journal of Human Resources, 8(4): 436–455.CrossRefGoogle Scholar
Bond, Horace Mann (1960). The Origin and Development of the Negro Church-Related College. Journal of Negro Education, 29(3): 217–226.Google Scholar
Brooks, Roy L. (2004). Atonement and Forgiveness: A New Model for Black Reparations., Berkeley, CA: University of California Press.Google Scholar
Chernozhukov, Victor, Fernandez-Val, Ivan, and Melly, Blaise (2013). Inference on Counterfactual Distributions. Econometrica, 81(6): 2205–2268.Google Scholar
Cheslock, John J., and Shamekhi, Yahya (2020). Decomposing Financial Inequality Across U.S. Higher Education Institutions. Economics of Education Review, 78(2020): 102035.CrossRefGoogle ScholarPubMed
Chetty, Raj, Hendren, Nathaniel, Kline, Patrick, and Saez, Emmanuel (2015). Economic Mobility. Pathways: The Poverty and Inequality Report 2015, Stanford Center On Poverty and Inequality. Palo Alto, CA: Stanford University.Google Scholar
Christensen, Harold R., and Rankin, Elizabeth L. (2011). Do College Endowments Matter?: The Case of Educational Spending, Southwestern Economic Review, 30(2011): 35–42.Google Scholar
Collins, William J., and Wanamaker, Marianne H. (2022). African American Intergenerational Economic Mobility Since 1880. American Economic Journal: Applied Economics, 14(3): 84–117.Google Scholar
Coupet, Jason, and Barnum, Darold (2010). HBCU Efficiency and Endowments: An Exploratory Analysis. International Journal of Educational Advancement, 10(3): 186–197.Google Scholar
Craemer, Thomas, Smith, Trevor, Harrison, Brianna, Logan, Trevon, Bellamy, Wesley, and Darity, William Jr. (2020). Wealth Implications of Slavery and Racial Discrimination for African American Descendants of the Enslaved. Review of Black Political Economy, 47(3): 218–254.CrossRefGoogle Scholar
Cunningham, Gary L., Avner, Marcia L., and Justilien, Romilda (2014). The Urgency of Now: Foundations’ Role in Ending Racial Inequity. Foundation Review, 6(1): 51–65.CrossRefGoogle Scholar
Darity, William Jr. (2019). Running the Numbers on Closing the Racial Wealth Gap. Samuel DuBois Cook Center on Social Equity. Durham, NC: Duke University.Google Scholar
Darity, William A. Jr. and Mullen, A. Kirsten (2022). From Here to Equality: Reparations for Black Americans in the Twenty-First Century. Durham, NC: UNC Press Books.Google Scholar
Derenoncourt, Ellora, Kim, Chi Hyun, Kuhn, Moritz, and Schularick, Moritz (2022). Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860–2020. NBER Working Paper No. w30101, National Bureau of Economic Research. Cambridge, MA.Google Scholar
Dougal, Casey, Gao, Pengjie, Mayew, William J., and Parsons, Christopher A. (2019). What’s In a (School) Name?: Racial Discrimination in Higher Education Bond Markets. Journal of Financial Economics, 134(3): 570–590.CrossRefGoogle Scholar
Drewry, Henry N., and Doermann, Humphrey (2012). Stand and Prosper: Private Black Colleges and Their Students. Princeton, NJ: Princeton University Press.Google Scholar
Drezner, Noah D., and Gupta, Anubha (2012). Busting the Myth: Understanding Endowment Management at Public Historically Black Colleges and Universities, Journal of Negro Education, 81(2): 107–120.CrossRefGoogle Scholar
Eaton, Charlie, Habinek, Jacob, Goldstein, Adam, Dioun, Cyrus, Garcia, Daniela, Godoy, Santibanez, and Osley-Thomas, Robert (2016). The Financialization of U.S. Higher Education, Socio-Economic Review, 14(3): 507–535.Google Scholar
Ehrenberg, Ronald G. (1996). Are Black Colleges Producing Today’s African-American Lawyers? Journal of Blacks in Higher Education, 14(Winter 1996/1997): 117–119.CrossRefGoogle Scholar
Eide, Stephen (2018). Private Colleges in Peril: Financial Pressures and Declining Enrollment May Lead to More Closures. Education Next, 18(4): 35–41.Google Scholar
Elu, Juliet, Ireland, Jared, Jeffries, David, Johnson, Ivory, Jones, Ellis, Long, Dimone, Price, Gregory N., Sam, Olatunde, Simons, Trey, Slaughter, Frederick, and Trotman, Jamal (2019). The Earnings and Income Mobility Consequences of Attending a Historically Black College/University: Matching Estimates From 2015 U.S. Department of Education College ScorecardData. Review of Black Political Economy, 46(3): 171–192.CrossRefGoogle Scholar
Elze, Markus C., Gregson, John, Baber, Usman, Williamson, Elizabeth, Sartori, Samantha, Mehran, Roxana, Nichols, Melissa, Stone, Gregg W., and Pocock, Stuart J. (2017). Comparison of Propensity Score Methods and Covariate Adjustment: Evaluation in 4 Cardiovascular Studies. Journal of the American College of Cardiology, 69(3): 345–357.CrossRefGoogle ScholarPubMed
Fong, Christina M., and Luttmer, Erzo FP (2011). Do Fairness and Race Matter in Generosity?: Evidence From a Nationally Representative Charity Experiment. Journal of Public Economics, 95(5/6): 372–394.CrossRefGoogle Scholar
Fryer, Roland G. Jr. and Greenstone, Michael (2010). The Changing Consequences of Attending Historically Black Colleges and Universities. American Economic Journal: Applied Economics, 2(1): 116–148.Google Scholar
Gasman, Marybeth, Samayoa, Andres Castro, Benyehudah, Kemuel, and Fowlkes, Anthony (2022). Philanthropic Support of Historically Black Colleges and Universities in the 21st Century. Journal of Higher Education Policy and Leadership Studies, 3(3): 38–53.Google Scholar
Gasman, Marybeth, and Drezner, Noah D. (2008). White Corporate Philanthropy and its Support of Private Black Colleges in the 1960s and 1970s. International Journal of Educational Advancement, 8(2): 79–92.CrossRefGoogle Scholar
Gompers, Paul, and Lerner, Josh (2001). The Venture Capital Revolution. Journal of Economic Perspectives, 15(2): 145–168.Google Scholar
Hamilton, Laura T., Dawson, Caleb, Armstrong, Elizabeth A., and Waller-Bey, Aya (2024). Racialized Horizontal Stratification in U.S. Higher Education: Politics, Process, and Consequences. Annual Review of Sociology. https://doi.org/10.1146/annurev-soc-083123-035938CrossRefGoogle Scholar
Hammond, Miriam, Owens, LaToya, and Gulko, Brian (2021). HBCUs Transforming Generations: Social Mobility Outcomes for HBCU Alumn. Frederick D. Patterson Research Institute. Washington, DC: United Negro College Fund.Google Scholar
Hansmann, Henry (1990). Why Do Universities Have Endowments? Journal of Legal Studies, 19(1): 3–42.CrossRefGoogle Scholar
Harbecke, Jens (2021). Counterfactual Theories of Causation and the Problem of Large Causes. Philosophical Studies, 178(5): 1647–1668.CrossRefGoogle Scholar
Hardy, Precious M., Kaganda, Elizabeth J., and Aruguete, Mara S. (2019). Below the Surface: HBCU Performance, Social Mobility, and College Ranking. Journal of Black Studies, 50(5): 468–483.CrossRefGoogle Scholar
Harris, Adam (2021). The State Must Provide: Why America’s Colleges Have Always Been Unequal—and How To Set Them Right. New York: Ecco Press, Harper Collins.Google Scholar
Hoxby, Caroline M. (2012). Endowment Management Based on a Positive Model of the University. NBER Working Paper No. w18626. National Bureau of Economic Research, Cambridge, MA.CrossRefGoogle Scholar
Hoxby, Caroline M. (2014). Endowment Management Based on a Positive Model of the University. In Brown, Jeffrey R. and Hoxby, Caroline M. (Eds.), How the Financial Crisis and Great Recession Affected Higher Education, pp. 15–42. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
Hume, David (2000). An Enquiry Concerning Human Understanding: A Critical Edition. Oxford, UK: Oxford University Press.Google Scholar
Hunt Institute (2022). Addressing Historic Underfunding of HBCUs: Implementing Bipartisan Legislation in Tennessee. Issue Brief 3, Cary, NC.Google Scholar
Imai, Kosuke, King, Gary, and Nall, Clayton (2009). The Essential Role of Pair Matching in Cluster-Randomized Experiments, with Application to the Mexican Universal Health Insurance Evaluation. Statistical Science, 24(1): 29–53.CrossRefGoogle Scholar
Imai, Kosuke, King, Gary, and Stuart, Elizabeth (2008). Misunderstandings Among Experimentalists and Observationalists about Causal Inference. Journal of the Royal Statistical Society, Series A, 171(2): 481–502.CrossRefGoogle Scholar
Jung, Yeonha (2023). Formation of the Legacy of Slavery: Evidence From the U.S. South. European Economic Review, 154(2023): Article 104409.CrossRefGoogle Scholar
King, Gary, and Nielsen, Richard (2019). Why Propensity Scores Should not be Used for Matching. Political Analysis, 27(4): 435–454.CrossRefGoogle Scholar
Koch, James V., and Swinton, Omari (2023). Colleges and Upward Economic Mobility: The Distinctive Contributions of HBCUs. American Economic Review, 113(5): 446–450.Google Scholar
Lee, Hsiu-Ling (2008). The Growth and Stratification of College Endowments in the United States. International Journal of Educational Advancement, 8(3-4): 136–151.CrossRefGoogle Scholar
Lewis, David (2000). Causation as Influence. Journal of Philosophy, 97(4): 182–197.CrossRefGoogle Scholar
Lo, Adeline, Chernoff, Herman, Zheng, Tian, and Lo, Shaw-Hwa (2015). Why Significant Variables Aren’t Automatically Good Predictors. Proceedings of the National Academy of Sciences, 112(45): 13892–13897.CrossRefGoogle ScholarPubMed
Loubert, Linda (2004). Discrimination in Education Financing. Review of Black Political Economy, 32(3-4): 17–27.CrossRefGoogle Scholar
Margo, Robert A. (2016). Obama, Katrina, and the Persistence of Racial Inequality. Journal of Economic History, 76(2): 301–341.CrossRefGoogle Scholar
Marks, Meghan K. (2023). 40 Acres and a Mule: Accountability for Corporations to Provide Reparations to Historically Black Colleges and Universities for Profits from Slave Labor. Emory Corporate Governance and Accountability Review, 10(2): 312–346.Google Scholar
Meyer, Heinz-Dieter, and Zhou, Kai (2017). Autonomy or Oligarchy?: The Changing Effects of University Endowments in Winner-Take-All Markets. Higher Education, 73: 833–851. https://doi.org/10.1007/s10734-017-0109-1.CrossRefGoogle Scholar
Nabrit, Samuel M. (1971). Reflections on the Future of Black Colleges. Daedalus, 100(3): 660–677.Google Scholar
Norton, Barbara J., and Strube, Michael J. (2001). Understanding Statistical Power. Journal of Orthopaedic & Sports Physical Therapy, 31(6): 307–315.CrossRefGoogle ScholarPubMed
Oaxaca, Ronald (1973). Male-Female Wage Differentials in Urban Labor Markets. International Economic Review, 14(3): 693–709.CrossRefGoogle Scholar
Ortega, Alberto, and Swinton, Omari (2018). Business Cycles and HBCU Appropriations. Journal of Economics, Race and Policy, 1(2018): 176–195.CrossRefGoogle Scholar
Price, Gregory, and Viceisza, Angelino (2023). What Can Historically Black Colleges and Universities Teach about Improving Higher Education Outcomes for Black Students? NBER Working Paper No. w31131, National Bureau of Economic Research, Cambridge, MA.Google Scholar
Price, Gregory N., and Robinson, Brooks (2023). Did Elijah Muhammad’s Message to the Black Man Uplift Adherents?: The Treatment Effects of Membership in the Nation of Islam. Review of Black Political Economy, 50(3): 291–309.CrossRefGoogle Scholar
Price, Gregory N., and Surprenant, Chris W. (2022).The Treatment Effect of Business Education on the Supply of High School Entrepreneurs in Atlanta and New Orleans. American Economist, 67(1): 85–98.CrossRefGoogle Scholar
Rose, Deondra (2022). Race, Post-Reconstruction Politics, and the Birth of Federal Support for Black Colleges. Journal of Policy History, 34(1): 26–59.CrossRefGoogle Scholar
Rubin, Donald B (2005). Causal Inference Using Potential Outcomes: Design, Modeling, Decisions. Journal of the American Statistical Association, 100(469): 322–331.CrossRefGoogle Scholar
Sav, Thomas (2000). Tests of Fiscal Discrimination in Higher Education Finance: Funding Historically Black Colleges and Universities. Journal of Education Finance, 26(2): 157–172.Google Scholar
Shadish, William R. (2010). Campbell and Rubin: A Primer and Comparison of Their Approaches to Causal Inference in Field Settings. Psychological Methods, 15(1): 3–17.CrossRefGoogle Scholar
Sharpe, Rhonda Vonshay (2004). All Land grants Were Not Created Equal: The Benefits of White Privilege. Review of Black Political Economy, 32(3-4): 29–38.CrossRefGoogle Scholar
Shugars, Sarah, and Beauchamp, Nicholas (2019). Why Keep Arguing?: Predicting Engagement in Political Conversations Online. Sage Open, 9(1): 1–13.CrossRefGoogle Scholar
Smith, Denise (2021). Achieving Financial Equity and Justice for HBCUs. New York: The Century Foundation.Google Scholar
Smith, Jennifer M., and Jackson, Elliot O. (2019). Historically Black Colleges and Universities: A Model for American Education. Florida A & M University Law Review, 14(2019): 103–109.Google Scholar
Stokes, Arianna C. (2023). The Miseducation of the Public: Exposing the Cracked Lens On HBCUs. Mississippi Free Press, January 27. https://www.mississippifreepress.org/the-miseducation-of-the-public-exposing-the-cracked-lens-on-hbcus/ (accessed March 6, 2025).Google Scholar
Straubel, Sara (2024). Good Intentions are Not Enough: Exploring Implicit Racial Bias in Philanthropy. Unpublished Dissertation, Sol Price School of Public Policy, University of Southern California, Los Angeles, CA.Google Scholar
Tobin, James (1974). What is Permanent Endowment Income? American Economic Review, 64(3): 427–432.Google Scholar
Trent, William J. (1971). The Future Role of the Negro College and its Financing. Daedalus, 100(3): 647–659.Google Scholar
U.S. Department of Education (2023). Secretaries of Education, Agriculture Call on Governors to Equitably Fund Land-Grant HBCUs. Washington, DC. https://www.usda.gov/about-usda/news/press-releases/2023/09/18/secretaries-education-agriculture-call-governors-equitably-fund-land-grant-hbcus (accessed March 13, 2025)Google Scholar
Votaw, Dow, and Sethi, S. Prakash (1970), Some Paradoxes in the Support of Predominantly Black Colleges. Journal of Higher Education, 41(9): 673–694.CrossRefGoogle Scholar
Williams, Jhacova A., Logan, Trevon D., and Hardy, Bradley L. (2021). The Persistence of Historical Racial Violence and Political Suppression: Implications for Contemporary Regional Inequality. ANNALS of the American Academy of Political and Social Science, 694(1): 92–107.CrossRefGoogle Scholar
Willie, Charles V. (1990). The Social and Historical Context: A Case Study of Philanthropic Assistance. In Willie, Charles V., Garibaldi, Antoine M., and Reed, Wornie L. (Eds.), The Education of African Americans: Assessment of the Status of African Americans , Vol. III, pp. 7–22. Boston, MA: William Monroe Trotter Institute, University of Massachusetts-Boston.Google Scholar
Wooten, Melissa E. (2015). In the Face of Inequality: How Black Colleges Adapt. Albany, NY: State University of New York Press.Google Scholar