White House Offers Guidance on HBCU Economic Development, Rust's New President and Following Up on Financial Exigency

WHI-HBCU Economic Development Plan Falls Short on Deliverables

The White House Initiative on Historically Black Colleges and Universities recently issued a guidance document on economic development strategies and outlook in the nation’s effort to recover from the global COVID-19 pandemic.

The guidance offers possible connections for HBCUs with the Economic Adjustment Assistance Program, which offers grant funding to organizations looking to jumpstart economies in distressed regions.

The document is long on blue-sky objectives for HBCUs to anchor themselves in economic recovery. Recommendations include black colleges seeking grants and contracts to deliver broadband Internet access to underserved communities, recruiting and training students from these same communities for 21st-century careers, and functioning as hubs for states’ specific economic development goals through public-private partnerships, among other tips and hints.

But the guidance falls short on how HBCUs can step out of their teaching and training missions to function as machines of economic recovery. Outside of specific applied science and business programs that are boosted by corporate relationships and public grantmaking, most HBCUs do not have the personnel or the functionality to interface with government officials, corporate entities or municipal influencers to make any of these things possible.

A sign that the document misses the mark on help for HBCUs:

A simple, yet effective way for HBCU to access the Comprehensive Economic Development Strategy (CEDS): In the web search engine, type the keywords, “(Area, State) CEDS economic development,” e.g., “Nashville, TN CEDS economic development”; “Greensboro, NC CEDS economic development.” Generally, top search results include a link to the most recent CEDS for the target area.

So Google is a recommendation for HBCUs to access exclusive partnerships and funding?

A better report could have been a list of the key contacts in HBCU states for their respective chambers of commerce, economic development, or startup business funding initiatives and their open opportunities. A conference call with these officials, a webinar series on how to connect key figures in the federal Department of Commerce — anything that connects HBCUs with people who are connected to money and resources would’ve been a marvelous asset for the community.

So while the WHI-HBCU is doing a good job of shaping the narratives of how HBCUs can align their strategic thinking with the federal government and its funding opportunities under the Trump Administration, the relationship building and training to turn thinking into action remain elusive goals for the office.

Former San Antonio Mayor Ivy Taylor Named Rust President

Rust College named Ivy Taylor, a historic former mayor of San Antonio as its next president and the first woman to hold the position.

Taylor, who has earned a doctorate from the University of Pennsylvania and has served on the board of trustees of Huston-Tillotson University, comes into the Rust presidency with those credentials as the apex of her higher education experience, but with a world of invaluable municipal management insight and corporate connections.

A non-traditional female president follows a long-serving predecessor at an HBCU with room for improvement in enrollment and significant issues with deferred maintenance — in the middle of a global pandemic. This is either going to go historically well or fantastically bad.

One thing is for sure — its not a good sign when the college hasn’t updated the website with the announcement of its new president.

A Final Word on Financial Exigency

I recently wrote an overview of how some public HBCUs may be in jeopardy of declaring financial exigency as a route to avoid institutional collapse as states brace for severe economic downturn. A lot of people read and hear about exigency and think that schools are on the verge of closure, so I think it is worth highlighting the second paragraph of the recent post.

To most people, exigency sounds like the school is on the verge of closing. In actuality, the exigency declaration is a tool schools use to get around agreements with labor and faculty unions to implement cost-saving furloughs and layoffs with fewer headaches.

This is an important point to emphasize — exigency declaration is a tool. It can be an emergency financial off-ramp for schools dealing with budget cuts and enrollment decreases, but it can also be a preemptive strategy for boards and presidents to stay on the highway of financial stability before needing to cross three lanes in high-speed traffic to reach the off-ramp.

For most public institutions, there are strict rules about furloughing or laying off faculty and staff with tenure or long terms of service to the institution. The American Association of University Professors has been one of the most consistent organizations advocating for faculty protections, even in the midst of financial crisis.

Faculty and staff deserve to be protected, and deserve transparency in fiscal trends of an institution. They, not HBCU students, are the lifeline of the HBCU experience because they are the body that keeps students retained, trains them, and turns them into the graduates who go on to become employees who pay back their federal student loans.

But guidelines of shared governance and protecting jobs and benefits should not come at the cost of destroying an institution. The COVID-19 global pandemic is an exception to this rule.

HBCU executives should be considering this option now, not later, as a method of preserving precious resources that will avoid greater losses like entire programs or departments. In a letter to the Lincoln University campus community, President Jerald Jones Woolfolk described the process in illuminating detail.

We know that many of the questions that are running through your mind have to do with the University’s financial situation. Last month, we implemented a purchasing and hiring freeze and powered down vacant buildings in an effort to ease some spending. As you can imagine, every little bit helps. Still, the combination of a withholding of funds in the current fiscal year and uncertainty for the next; past and forecasted drops in enrollment; as well as refunds of room and board charges in this semester, have left us with serious financial concerns. On a daily basis we are looking at numbers, both student enrollment and dollar amounts, to understand exactly what we are facing and how we can sustain our University.

As trustees and presidents carefully consider the math on furloughs versus layoffs, cutting sports and academic programs, and taking buildings offline, the truth about HBCU operations becomes painfully clear. With the exception of some campuses’ executive administration budgets, black colleges do not operate with a great deal of fat in their financial ledgers.

For most companies, from small businesses to Fortune 100 corporations, coronavirus will soon claim all expendable cash reserves. Exhausting endowments is not an option — even for Ivy League institutions. From the Cornell University Daily Sun:

Joanne M. DeStefano, the University’s chief financial officer, explained in a statement emailed to The Sun that even with a $7.2 billion endowment, there are significant legal restrictions imposed on a majority of the assets by New York State that “prevent overspending from endowments (anything greater than 7%).” Donations “can only be used for the purposes specified in the gift agreement,” preventing the allocation of these funds to compensate for massive revenue loss or provide emergency student aid.

Twenty-two percent of Cornell’s endowment is for professorships, as of 2019, according to a University financial report. Twenty-nine percent is earmarked for academic programs and research, 26 percent is for financial aid and another 20 percent goes toward “general purpose and facilities support.”

“It is not a cash reserve [emergency fund] that can be drawn on at will, but is the University’s permanently invested capital — a perpetual and self-sustaining source of support for the University and its mission,” DeStefano wrote.

HBCUs were cutting things close before COVID-19, and face extinction in the midst of the response. The most responsible thing to save many of our schools may be the most drastic, and the most necessary for their survival.

But the key to grace and dexterity in these scary times is not the decision to declare exigency, it’s in how long leaders take to make the call.