Yesterday marked the first time our nation will celebrate Dr. Martin Luther King Jr.'s birthday aided by the gift of his carved likeness movingly emerging from a mountain of despair with a message of hope. Located in the nation's capital just yards from where he delivered his eloquent "I Have a Dream" speech, the already iconic memorial is, in part, a testament to how private philanthropy can stabilize African American excellence in perpetuity. It is also a visual wake-up call for those who have been asleep to the empowering way King summoned the world from chaos to community. Perhaps King's most enduring legacy is his reminder that people of good will can draw upon ancient wells of moral courage to find strength and power they did not know they had. His vision of a new future awakened millions to that strength and power. And now that he is fittingly enshrined in granite at President Lincoln's right hand, it is timely to consider what his empowerment message means for our nation's historically black colleges and universities (HBCUs).
Dr. King is inarguably the most illustrious HBCU graduate. His personal story reflects the traditionally touted virtues of these treasured institutions, including their ability to transform less prepared students into competitive graduates. When King entered Morehouse College he was reading at an 8th grade level, but by the time he finished in 1948, he was ready for the graduate work that put the "Dr." before his name. Like many other HBCU graduates, King benefited from the extensive personal mentoring he received from Morehouse College's faculty and, in his case, its remarkable president, Dr. Benjamin Elijah Mays. The president sensed his student's potential, took a personal interest in his academic success, and grew close to him over many years. King's transformative experience under Mays is symbolic of how HBCUs produced a disproportionate number of extremely bright, mission-driven change agents ready to confront and reform the world's many rough and crooked places. Less well known is King's unwitting presence at the start of another revolution that merits the attention of HBCUs today.
On Oct. 29, 1967, Dr. King traveled with his mentor, Dr. Mays, to deliver a Convocation address at Grinnell College in Iowa, where Mays was to introduce King to the assembled crowd of 5,000. At the time, both Mays and King served on the Morehouse College Board of Trustees -- King joined in April 1965 with Mays' advocacy, while Mays himself became a member in the summer of 1967, shortly after completing his 27-year tenure as president. As they made their way to Iowa, however, their flight was delayed. Their late arrival that day gave two other men in the waiting Grinnell audience some extra time to chat and deepen a friendship that over time helped Grinnell become a self-sufficient academic powerhouse.
The first of those two men in the crowd was Joseph Rosenfield, a 1925 Grinnell graduate. Rosenfield was so appreciative of how his Alma Mater nurtured and prepared him that he made it the cause of his life to strengthen the institution beyond compare. He built a successful law and business career, which provoked the Des Moines Register to refer to him as the "Patriarch of Iowa Business." In turn, he joined Grinnell's Trustee Board and served as Chair from 1948 to 1952.
Rosenfield's passion about strengthening Grinnell College must have been palpable on that October day in 1967, as he spoke with the younger gentleman who was making significant business strides of his own. Their close, multi-year friendship would be dominated by a singular, mutual aim: to enlarge Grinnell's endowment. As a Trustee, Rosenfield said he wanted to make Grinnell "financially impregnable." To that end, he helped to assemble a capable team of like-minded board members and set a new endowment growth trajectory.
As a result of their discipline and determination, the Grinnell endowment had increased from $1 million -- its value on the day when Rosenfield joined the board in 1941 -- to $10 million on the day of King's 1967 campus visit. By the time America's most prestigious universities made their own aggressive push for larger endowments beginning in 1986, when Stanford University launched the first billion dollar capital campaign, Grinnell's endowment had grown to a respectable $175 million. But that was not enough for Rosenfield and his colleagues, who had not yet reached the financial impregnability they had targeted. So they persisted.
By 2000, when Rosenfield died, the endowment or bank account of a school most people around the world had never even heard of had reached an astonishing $862 million. And while other institutions were building endowments using major capital campaigning, broad and continuous alumni contributions, and scores of transformational gifts from non-alumni friends, Grinnell's achievement stemmed from its disciplined practice of taking calculated risks in the context of prudent asset management. In other words, the Grinnell board employed a strategy that any under-resourced college or university could have used, if aided and driven by an alert, astute and appropriately single-minded board of trustees.
It was a revolution. Soon after he graduated in 1925, when the endowment was valued at under $2 million, Rosenfield essentially said, "I have a dream to remove financial need from the life and future of Grinnell College." What ensued was anything but a dream deferred. At its peak in 2007, Grinnell's endowment reached $1.7 billion. As a result, not even a bad patch of modest investment returns could keep Grinnell's leaders from being able to control their own institutional destiny.
Rosenfield's inspiring legacy was to establish a firm foundation for all Grinnellians to realize their dreams in perpetuity. His dream-quest partner, whom he got to know better while waiting to hear Dr. King talk about non-violence and civil rights, and who joined the Grinnell board the following year was a relatively unknown man at the time: Warren E. Buffett.
Like Rosenfield and Buffett at Grinnell, Drs. King and Mays were also focused on building the endowment at their college, Morehouse, which was valued at just $4.7 million in 1967. Mays' autobiography makes it clear he had also prioritized fundraising. But, leading an HBCU, he found it an especially difficult task at that time. "I trailed far behind my fondest expectations," he wrote. In 1971, Mays referred to expanding an endowment as the "eternal labor for all colleges and for colleges serving Negroes it is trebly hard." Trustee King understood the importance of building a great endowment too, but his more pressing preoccupation was building a great America that respected the civil rights of all its citizens.
It is true that industrial-age American wealth found its way into HBCU endowments at levels as yet unmatched. But what might have happened had Mays and King somehow joined the Rosenfield and Buffett conversations that Sunday morning and in the months and years that followed? What if the visit by Buffett, a non-Grinnellian whose role as a Grinnell advisor was far more consequential than any apparent role he played as a Grinnell donor, had somehow triggered a revolutionary surge in HBCU endowments as well?
Although it is an incomplete measure of financial sustainability, endowment in relation to annual expenses is among the most important determinants of institutional competitiveness in higher education today. Mark Schneider, a Grinnell Physicist who examined the suitable size of a college endowment, persuasively argues that an institution's endowment-expense ratio should be between five to 10 -- that is, their endowment should be anywhere from five to 10 times larger than their total annual expenses. Thanks to the Rosenfield/Buffett revolution Grinnell's peaked at over 20. By contrast, Spelman College, at four, is now the only HBCU with an endowment-expense ratio greater than two. And like most institutions of higher education, the endowment-expense ratio of nearly every other HBCU is between zero and one.
The practical implications of this striking disparity are real and far-reaching. First of all, endowments enable institutions to develop and maintain competitive living, learning and working environments for their students, faculty and staff. Also, if sufficiently unrestricted, a sizable endowment can give the institution the capacity to nimbly avoid the kind of mission drift that is so often a by-product of fiscal instability and economic uncertainty. In general, colleges and universities with high endowment-expense ratios have the independent ability to generate and capitalize on the best innovations associated with institutional strength in higher education worldwide.
For instance, they are able to cap or eliminate the loan indebtedness of their graduates, or underwrite the kind of professional internships that will provide their undergraduate students with a competitive edge in the job market. They can finance enriching overseas travel experiences, and conscientiously and programmatically enhance their production of the King-style servant leaders for which the nation and world remain starved. These better-endowed institutions have the latitude to select undergraduate class cohorts representing as broad a range of competencies as they desire, since they hold resources sufficient to fully serve, develop and graduate their students.
In comparison, HBCU endowments are invariably insufficient, especially given how central their vital missions are to America's critical need for human resource development and sustainable economic growth. Historically speaking, HBCUs were the primary institutional forces that nearly erased black illiteracy and diminished black poverty. Yet their contemporary relevance and productivity are far more compelling and speak directly to their current "investment worthiness."
HBCUs enroll a mere 10 percent of the African Americans in higher education, yet they generate 24 percent of all African American college graduates. They confer 28 percent of the bachelor's degrees awarded to African Americans in the science, technology, engineering and math fields, and 33 percent of such recent African American Ph.D.s received their undergraduate degrees from HBCUs. These institutions and their graduates will do even more for our nation when they enjoy the financial stability of their best non-HBCU competitors. Herein lies the visionary import of the quiet revolution achieved at Grinnell College and its relevance to Dr. King's unrealized dream.
With this current HBCU value proposition in mind, it is worth asking whether HBCU supporters and beneficiaries are asleep to the opportunity to build stronger endowments in amounts that were beyond the reach of the previous generation. Who are the unheralded "Rosenfields" in today's HBCU world? What are the names of the alumni currently "under the radar" and the board chairs who are ready to demonstrate that endowment growth is the single best way to show their gratitude for the schools that made their success possible? Is there an active definition of "financial impregnability" among HBCU leaders? And where are the seemingly unreachable goals that when identified accelerate progress? Given the state of HBCU endowments today, more significant growth in this area is necessary to usher in the next and most essential phase of the proud HBCU story: stability. What's more, larger endowments will finally position post-segregation HBCUs well beyond the capacity impairment threshold that has been their lot for far too long.
It is reasonable to speculate that Dr. King's deep concern about equity would have extended to American higher education. He would have recognized economic disparity as a common root of the challenges facing African-Americans, HBCUs and the American future itself.
Most of all, Dr. King would have found the words to help us all see it as a supreme and correctable irony that the very "underdog" institutions most in need of substantial endowments, based on their abiding culture of inclusion and productivity, do not yet have them. But this story is rich with other intertwined ironies. Dr. King embraced Dr. Mays as his spiritual father. Warren Buffett viewed Joe Rosenfield as his adopted father. Bernice King, the youngest daughter of Dr. King, attended Grinnell College. Susan Buffett, the only daughter of Warren Buffett, served on the Morehouse Trustee board. And today, the America that King and Mays wanted to strengthen and the Grinnell that Rosenfield and Buffett wanted to strengthen are each presided over by leaders who are African American men.
The leadership lessons from the revolutions wrought by King, Mays, Rosenfield and Buffett are deeply interrelated. HBCUs have arrived at a time in their history when their boards and presidents must discover and uncover their power and strength. They can do this by summoning up a Rosenfield-like focus on building their own quiet revolutions until they too reach financial impregnability. One way to make this happen is by ensuring that building a better endowment-expense ratio is among the most critical measures of success for the tenure of any HBCU college or university president or trustee. And even if endowment growth is not the primary mission of the board, as it was at Grinnell, it ought to be their primary discussion, as well as the primary basis for their engagement with alumni.
A peerless champion of the disadvantaged, Dr. King's challenging gaze is now appropriately fixed in and on the nation's capital. His memorial is a permanent reminder of his unique and still unfinished revolution of which many of us are aware. But back in October 1967, when Rosenfield and Buffett were together in a room to hear Dr. King build a message around Rip Van Winkle's slumber through revolutionary change, they started a critically important quiet revolution of their own that has left Grinnell secure. With a sleepless determination, they shifted their institution from tuition dependency to endowment dependency, using an approach of which only a few leaders in higher education are aware.
Thus, it might be the biggest of all ironies that Dr. King's topic on that October day in Iowa was the same as the topic of his final Sunday morning sermon, delivered at the National Cathedral in Washington, D.C., on March 31 1968, four days before he was assassinated. He entitled them both, "Remaining Awake During a Revolution."
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more