“It is hard to determine a worse proposition for historically black colleges; that industry, culture and finance have converged to threaten the existence of most of our schools, or that Black America doesn’t have the wealth or awareness to do anything about it. About 50 HBCUs will survive the next decade.” (HBCU Digest 2017)
Such is the somber assessment reported in HBCU: A profile in Survival and Success by John Rosenthal, Chairman of the Tougaloo Center for Research and Development Foundation (TCRDF). In the first quarter of 2018, TCRDF and our predecessor organization, WHATIF MS, designed and promoted the establishment of a $500 million innovation fund to support Historic Black Colleges and Universities (HBCUs).
HBCUs were created shortly after the US Civil War to educate African Americans coming out of slavery. These institutions were instrumental in the valorization of African American post slavery. They played a crucial role in providing the intellectual foundation for the Civil Rights, as well as generating inventions like new methods to store blood plasma or the yield enhancement practice of crop rotation.
Today, 105 HBCUs enroll approximately 11% of African American students, as the focus to educate the near entirety of the black middle class shifted following the Civil Rights Act of 1964, which opened the doors of long-established mainstream universities to African Americans. The whole group’s survival has been threatened by decreasing enrollment, low endowments, over-dependency on federal funding, poor academic and sport facilities. Some of the HBCUs are financially stable while the majority faces severe financial challenges. Yet, 20% of college-educated African Americans attended an HBCU and 25% of degrees earned in Science, Technology, Engineering and Math (STEM) are awarded by HBCUs. Despite historic under-funding, their economic impact was considerable as attest this recent landmark study.
The WHATIF88-HBCU Social Innovation Fund is an innovative vehicle intended to support HBCUs’ patents and Intellectual Property (IP) portfolio as well as increase HBCUs’ ability to attract federal contracts and grants. The Fund leverages HBCUs’ research and seeks to help monetizing promising IP initiatives in the military, aerospace, transportation, health science, homeland security and technology sectors.
The Fund’s structure follows a conventional Private Equity (PE) model with appropriate manager’s remuneration, investor incentives and alignment of interest. In order to bolster the research capabilities of - and attract leading scientists at - participating HBCUs, a 20% allocation from the carried interest is carved out as a grant fund and matched dollar by dollar by contributions from donors and foundations.
In an effort to mobilize investors and raise the profile of the Fund, nineteen of the largest US corporations were approached by WHATiF88 and Tougaloo College Research and Development Foundation (TCRDF) with this letter offering.
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