In higher education, a strong endowment is often seen as the ultimate marker of stability. It allows institutions to plan confidently for the future, attract top talent, and weather economic storms. But for the nation’s Historically Black Colleges and Universities (HBCUs), endowment disparities remain a stark reminder of how centuries of inequity continue to shape the present.
The top 10 largest endowments from Predominantly White Institutions (PWIs) and top 10 HBCUs in 2024 were $336 billion and $2.6 billion, respectively, representing a drastic 129-to-1 endowment ratio. While the endowments at 226 PWIs exceed $1 billion, Howard University became the first HBCU to achieve this milestone last year, and only eight HBCUs have endowments over $1 million.
HBCUs Produce Extraordinary Results
For generations, HBCUs have delivered extraordinary results with far fewer resources. Though they represent only about 3% of U.S. colleges and universities, they produce nearly 20% of Black college graduates, including 40% of Black engineers and members of Congress, 70% of Black doctors, and 50% of Black teachers. However, the average endowment at an HBCU remains a fraction of that at predominantly white institutions.
This gap is not the result of a lack of institutional will or alumni loyalty. It’s rooted in structural inequities. The white-Black wealth gap, which currently stands at 6-to-1, means Black alumni have historically had less to give, while state and federal funding formulas have often left HBCUs shortchanged. As a result, many schools operate with limited financial cushions, making it harder to invest in infrastructure, innovate for the future, respond to crises, or meet the financial needs of their students.
Why Endowments Matter
Endowments play a critical role in changing that trajectory. They are restricted funds, designed to be invested so that only a portion of the returns are used each year. The principal stays intact, creating a permanent source of income to support scholarships, faculty development, and long-term initiatives. Growing these funds is essential for increased HBCU competitiveness and resilience.
Thankfully, we’re starting to see momentum. In recent years, several major efforts have recognized that strengthening HBCU endowments is an investment in the nation’s economic future. Earlier this year, MacKenzie Scott contributed $70 million to the United Negro College Fund (UNCF) to bolster its Members Pooled Endowment Fund, designed to strengthen the long-term financial health of UNCF’s member institutions. Another example is the partnership between Base10 Partners, a venture capital firm, and Student Freedom Initiative, the organization I lead. Together, we’ve expanded the investment options available to HBCU endowments by lowering barriers to entry, fees, and holding periods.
These efforts are transformative. They help institutions build financial foundations that can support generations of students. However, as we celebrate these wins, it’s important to recognize what endowments cannot do in the short term.
HBCUs Also Need Flexible, Unrestricted Support
Because endowments are restricted, they don’t offer immediate flexibility. They can’t easily be tapped to address urgent needs like modernizing campus cybersecurity, replacing outdated labs, reducing student loan debt, or closing the digital divide that still leaves too many students behind. For that, HBCUs need something just as powerful – unrestricted and flexible funds that can be deployed quickly, strategically, and with impact.
To help fill this gap, MacKenzie Scott provided $560 million in 2020 and $700 million in 2025 in unrestricted funds to HBCUs to address HBCU-identified priorities. This is also where Student Freedom Initiative and its entire slate of wraparound services come in.
How Student Freedom Initiative Fills Critical Gaps
SFI was created to complement efforts to strengthen HBCUs financially by providing the kinds of support that build institutional capacity and expand student opportunity today. Our mission is to remove financial, technological, and structural barriers that limit student and institutional freedom.
We accomplish this through programs designed in partnership with HBCUs. Our Student Freedom Loan Agreement offers an affordable alternative to high-interest private and Parent PLUS loans. internXL connects students to paid internships and career pathways in fields where they’ve been historically underrepresented. Our cybersecurity programhas fortified campus systems, helping to safeguard over $1.5 billion in federal funding.
We’re also investing in career pathways, affordable campus and community housing, and broadband expansion, all critical infrastructure that strengthens schools themselves. And, we provide microgrants that help students overcome emergencies that might otherwise derail their education.
These investments complement the endowment-building work already underway by giving schools and students the flexibility to innovate and compete. They make the process of growing endowments more effective because institutions supported today will be stronger, more stable, and more competitive tomorrow.
If we want HBCUs to endure and expand their impact, we need to grow the endowments and invest in flexibility. One builds the foundation, while the other builds scaffolding that allows the foundation to remain strong under pressure.
The recent surge in HBCU philanthropy is encouraging, but there’s more to do. Every donor, corporate partner, and policymaker who believes in the transformative power of these institutions should think not just about the size of their gift, but about its structure. Endowments fuel the future. Unrestricted funds power the present.
Invest in the Long-Term Freedom of HBCUs
At Student Freedom Initiative, we believe the path to equity requires both. Our programs are designed to complement efforts to grow HBCU endowments. Together, they create a financial ecosystem that’s sustainable, responsive, and capable of supporting students and institutions for generations to come.
If we want HBCUs to thrive rather than just survive, now is the time to act. This Giving Tuesday, I invite you to look beyond the traditional notion of giving as charity and see it as a transformational investment in equity, innovation, and freedom. When you support institutions like Student Freedom Initiative, you help expand opportunity for students and strengthen the capacity of the schools that serve them. Your support translates directly into affordable financing options, cutting-edge campus infrastructure, and the tools students need to compete in today’s economy.
We’ve seen what’s possible when philanthropy aligns with purpose. Let’s continue that momentum this Giving Tuesday. When HBCUs have the freedom to flourish, they don’t just change individual lives – they change the entire nation.
Keith B. Shoates is president and CEO of Student Freedom Initiative.
