A Case Study Approach to Developing Financial Bases for Selected Historically Black Institutions Moses S
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Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1987 A case study approach to developing financial bases for selected historically black institutions Moses S. Walker Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the African American Studies Commons, and the Higher Education and Teaching Commons Recommended Citation Walker, Moses S., "A case study approach to developing financial bases for selected historically black institutions " (1987). Retrospective Theses and Dissertations. 9313. https://lib.dr.iastate.edu/rtd/9313 This Dissertation is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. 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Photographs included in the original manuscript have been reproduced xerographically in this copy. 35 mm slides or 6" X 9" black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. Accessing the World's Information since 1938 300 North Zeeb Road, Ann Arbor Ml 48106-1346 USA Order Number 8805148 A case study approach to developing financial bases for selected historically black institutions Walker, Moses S., Ph.D. Iowa State University, 1987 UMI 300 N. Zeeb Rd. Ann Arbor, MI 48106 A case study approach to developing financial bases for selected historically black institutions by Moses S. Walker A Dissertation Submitted to the Graduate Faculty in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY Department: Professional Studies in Education Major: Education (Higher Education) Approved ; Signature was redacted for privacy. In Charge of Major Work Signature was redacted for privacy. Fot th/ Major Department Signature was redacted for privacy. For the Graduate College Iowa State University Ames, Iowa 1987 il Page CHAPTER I. INTRODUCTION Fayetteville State University Philosophy and purpose of Fayetteville State University Mission statement of Fayetteville State University Admissions policy of Fayetteville State University Shaw University Institutional mission and purpose of Shaw University lo Need for this Study 12 The Purpose 14 Objectives 14 Case Study Procedure 15 Definition of terms 15 Organization of the Study 18 CHAPTER II. REVIEW OF LITERATURE 20 Development of Historically Black Institutions 20 The Freedmen's Bureau 22 Higher education for blacks 24 General 0. 0. Howard's report 26 The 1868 general superintendent's report 27 Historically black land-grant colleges 28 The black churches and black institutions 31 The federal government and higher education 34 Difficult times confronting historically black in stitutions 36 The significance of historically black institutions 38 The future of historically black institutions 39 Investment practices and options in higher education 39 College and university endowment and foundation funds in 1986 41 United Negro College Fund 41 The Common Fund 43 Investment policy of the Common Fund 45 ill Summary 46 CHAPTER III. METHOD AND PROCEDURE 50 Method 50 Design 50 Method of securing data 51 Population of Institution "A" 51 Population of Institution "B" 52 Investment models for historically black institutions 52 Procedure 53 CHAPTER IV. FINDINGS OF THE STUDY 54 Institution "A" 54 Reason for security market inactivity 55 North Carolina State Audit Office 56 The State of North Carolina State Treasury 57 Private historically black institutions 58 Institution "B" 58 Real estate properties 59 Security market operations 59 Investment portfolios 60 American Baptist Home Mission Societies reports 61 Additional investments 61 Additional Research 62 Historically black institutions in South Carolina 62 Historically black institutions in North Carolina 63 Historically black institutions in Virginia 63 Summary of the additional research 63 Summary 65 CHAPTER V. SUMMARY OF THE STUDY, CONCLUSION, DISCUSSION, AND RECOMMENDATIONS 71 Summary 71 The Problem 71 Population 71 Design 72 iv Findings of the study 72 Other historically black institutions in this study 73 Conclusion and Discussion 74 Recommendations 77 Cultivation of an active alumni association 78 Good public relations 80 Positive relations with students 80 Effective board of trustees 81 The role of the president 82 Church contribution to historically black institutions 83 Future role of the United Negro College Fund 85 Investment strategies 86 BIBLIOGRAPHY 88 ACKNOWLEDGMENTS 95 APPENDIX A: LETTERS TO INSTITUTIONS 98 APPENDIX B: LETTERS TO THE UNITED NEGRO COLLEGE FUND 103 APPENDIX C: LETTERS FROM SELECTED INSTITUTIONS 106 APPENDIX D: INVESTMENT MODEL 108 APPENDIX E: INSTITUTION PORTFOLIOS 111 APPENDIX F: COMMON FUND PARTICIPANTS 117 APPENDIX G: TABLES 130 APPENDIX H: FINANCIAL STATEMENTS 145 APPENDIX I; UNITED NEGRO COLLEGE FUND INSTITUTIONS 148 1 CHAPTER I. INTRODUCTION Historically black institutions in America have had a difficult time keeping their doors open and maintaining a solid capital founda tion. The shortage of operating capital diminishes the institution's ability to provide educational opportunities to students who are not financially capacitated to pay the normal tuition fees. Most historically black institutions depend primarily on federal and state financial assistance to support their operations. Financial gifts are often small and not sufficient to sustain long-term financial solvency. When federal and state reductions occur and contributions from donors decline, the financial assistance awarded to students is propor tionally affected (Academe, 1981). Black communities are not economically viable to provide the financial assistance needed to historically black institutions for development purposes and to maintain their present level of effective ness. Hence, the absence of a strong support program when allocated resources decline jeopardizes survival as well as development and growth (LeMelle & LeMelle, 1969; Jones, 1984). Unless the traditional black colleges can develop above their present level of effectiveness — un less the black community can achieve a collectively meaningful and reward ing participation in the welfare of historically black institutions and the United States society — the future viability of both the black American and the United States society itself is put in jeopardy (LeMelle & LeMelle, 1969; Jones, 1984). 2 As in any developmental situation where means are limited, the black college must look beyond internal budgetary sources for support. For black institutions supported by the state, this means seeking as sistance beyond that provided by state legislatures which traditionally expended less for black education than for white. For black privately supported colleges, this means going beyond limited financial gifts available from organized churches and private organizations that have had a special concern for traditional black education. Public and private historically black institutions must develop financial bases for invest ment purposes that will diminish the dependence of Pell Grants to students. Guaranteed Student Loans from the federal government, work study, and state loans to students for survival. Outside financial assistance is imperative for maintenance, continuity, and growth of historically black institutions. The reality of declining enrollments and budget realloca tions makes it essential for the historically black institution to seek alternative solutions to the financial resource problem (Franklin, 1947; Carter, 1985). Hodgkinson (1985) All One System states that twenty-nine percent (29%) more Blacks graduated from high school in 1982 than in 1975, but Black en rollment in college dropped eleven percent (11%) during the period. This decline in Black collegiate enrollment was attributed to declines in financial aid from the federal government, lack of relationship between a college degree and a good job, inadequate high school counseling programs for Blacks, and the fact that many historically white institutions are concentrating heavily in the area of Black recruitment due to the Adams Mandate (Adams Mandate, 1973) that called for all states to eliminate 3 racial segregation in public higher education institutions. In addition, some Blacks, along with other minorities believe that a college degree does not necessarily guarantee access to high level employment. The military service,