Despite being hard hit as the coronavirus pandemic continues to weigh on universities and colleges, Claflin University President Dr. Dwaun Warmack says that his university — and other historically black colleges and universities around the country — will continue to persevere.

The pandemic has been particularly devastating to historically black colleges and universities (HBCUs) which were already struggling financially.

“Our HBCU’s have been able to persevere for years without support,” Warmack told Yahoo Finance.

“We [historically] had no other choices, to provide access and opportunity for folks who didn’t have access and opportunity. That has been perpetuated over the years in the limited funding and the funding equity challenges,” he said.

But despite what some have described as a “slow death” of historically black colleges, Warmack believes that Claflin, in South Carolina, and others will be able to survive.

“Yes, it’s bleak,” he said, “in the sense that we have to find a way now — as we’ve always had to — to be creative and innovative to ensure our students have an opportunity not just to survive this, but thrive through this time as well.”

“This freshman class we just brought in again for the 10th consecutive year, our mean GPA is a 3.65. So we have top-quality students that are choosing our institutions because they want to be there. And so we will get through this financial piece,” Warmack added.

Cash flow woes

Even with the optimism, statistically, the future isn’t bright for HBCU’s.

Roughly 10% of HBCU’s are on a watchlist at the Department of Education for “heightened cash monitoring.” This list is a tracker from the government for schools most at risk for closure, due to “compliance issues including but not limited to accreditation issues, late or missing annual financial statements and/or audits, outstanding liabilities, denial of re-certifications, concern around the school's administrative capabilities, concern around a schools' financial responsibility,” and more.

The total endowment in 2019 of the more than 100 HBCU’s in the country stood at $2.1 billion; in contrast, the endowment for just Harvard University totaled $35.7 billion. More than 50 predominantly white institutions (PWI’s) have endowments larger than all HBCU’s combined.

According to the National Center for Education Statistics the endowment size for all colleges and universities in the country was roughly $600 billion by the end of fiscal year 2017, meaning that the total endowment size of HBCU’s combined represented less than 0.5% of the total.

This large funding gap has been in the spotlight recently as corporations have donated hundreds of millions of dollars to the Black Lives Matter movement. In June Netflix Chief Executive Reed Hastings donated $120 million to HBCU’s, distributing $40 million a piece to both Spelman and Morehouse Colleges and an additional $40 million to the United Negro College Fund (UNCF), which has 37 member institutions. Howard University received $40 million from MacKenzie Scott, former wife of Amazon founder and CEO Jeff Bezos.

“I love how corporations are looking at now helping support the endowments and funding some of our HBCU’s,” Warmack said. “I want to get one of the top 10 HBCU’s — Claflin University, that has been in the top 10 for consecutive years, in that mix.”

Funding gaps within HBCUs

And while a funding gap exists between HBCU’s and PWI’s, there are also large funding disparities among the HBCU’s themselves.

Howard University, Morehouse, and Spelman Colleges have become media darlings, receiving the lion’s share of donations from celebrities and business executives.

Warmack said that while he doesn’t want to take away from his colleagues at Howard, he would advocate for more funds to be distributed to other institutions.

“If you compare Howard to a lot of the large mainstream institutions,” Warmack said, “their [endowment] is low, respectively speaking. “But there’s other institutions out here that are doing just as good or better in a lot of the metric scales that could use some of that funding.”

Howard’s endowment is the largest among the HBCU’s, standing at roughly $700 million. Spelman follows, though its endowment is much smaller, at less than $400 million.

“I just think some of the other corporations and companies and major organizations just have to hear other names outside of the big ones. And so if there are some philanthropists that would like to give to an outstanding institution that's been doing transformational work, look at Claflin University,” he added.

Last year, President Trump signed a bipartisan bill to provide permanent funding for HBCU’s, and other institutions that serve first-generation and minority students. The move guaranteed over $2.5 billion in the course of the next decade, with $850 million specifically earmarked for HBCU’s.

But with more than 100 historically black colleges and universities, it’s unlikely the funds will make much impact, especially now as COVID-19 is causing additional financial stress. And with students no longer paying room and board, there are operational costs and budget deficits that cannot be recouped through HBCU funding.

“That’s not a lump sum of cash coming to HBCU’s,” Warmack explained.

“Those dollars from that $250 [million] can’t be used to make up a budget shortfall,” he added, noting that Claflin would have a $6 to $10 million deficit for the fall semester.

“I can't say that money directly impacts my bottom line.”

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

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