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A survey of endowment professionals at private historically Black colleges and universities found that these institutions face a range of constraints when trying to grow their endowments.

The survey, released Monday, was conducted by the United Negro College Fund, which represents private historically Black colleges and universities, and PGIM, a global asset management company. The report, based on a survey of 22 HBCU endowment professionals and a focus group, found that most non-HBCUs use income earned from their endowments for research, employee salaries, campus infrastructure and academic programs. In contrast, 86 percent of private HBCUs represented in the survey were restricted to using the funding for scholarships, with little money left over for other expenses.

Private HBCUs also tended to have only one internal professional focused on investment management, while non-HBCUs had six internal investment staff members on average, plus support from external asset managers, the report noted. While 86 percent of endowment professionals at non-HBCUs reported spending time on asset allocation, a little fewer than half of private HBCU investment professionals did. More than half, 55 percent, of professionals at HBCUs surveyed felt their institutions would benefit from more knowledge about how to make creative investments.

The report also found HBCUs to be more risk-averse in their investments than their non-HBCU counterparts. Most HBCU professionals surveyed described their risk tolerance as “moderate,” and the rest reported a conservative approach. Meanwhile, 19 percent of the HBCUs had no comprehensive risk management strategy, compared to 2 percent of non-HBCUs in the survey. Only 13 percent of the HBCUs represented had resources allocated to risk management, compared to 54 percent of their non-HBCU counterparts.

“HBCUs have, for centuries, pursued their missions without the endowment resources afforded to their counterparts. They have done tremendous work with a hand tied behind their back,” Ed Smith-Lewis, vice president for strategic partnerships and institutional programs at UNCF, said in a press release. “Using this study as a foundation, UNCF is leading the charge to forge a new era in which HBCUs are able to cultivate the endowments required to accelerate their work and impact.”