Joe Fuller: Education is a proven key to individual economic stability and wellbeing. Covid-19 and the Black Lives Matter movement have focused the nation’s attention on disparities in economic opportunity between Black and white America. Those events are bringing new urgency to efforts to ensure that more Black students get and stay on the pathway to economic independence associated with obtaining a college degree. Welcome to the Managing the Future of Work podcast from Harvard Business School. I'm your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. UNCF, founded in 1944 as the United Negro College Fund, supports 37 historically Black colleges and universities—or HBCUs. It also administers scholarships and internships. UNCF President and CEO Michael Lomax joins me to talk about how these historically underfunded institutions are working to expand their traditional role in bolstering the Black middle class. Dr. Lomax will share with us information as to the role of HBCUs in enhancing degree completion and economic outcomes for African American students. He also argues that the present moment has the potential to galvanize support for HBCUs and to attract more private and public resources to support their missions. As the US reckons with systemic bias, will HBCUs have the backing they need to prepare students for future economic opportunities and help reduce economic inequality? Well, Dr. Lomax, welcome to the Managing the Future of Work podcast.

Michael Lomax: Well, I'm delighted to be here, Joe. Thanks for the invitation.

Fuller: Michael, UNCF, formerly known as the United Negro College Fund, is certainly something familiar to me, something I grew up hearing about on television. And of course, both of my parents were educators. So I heard about historically Black colleges and universities from them. But I don't think many of our listeners will be as familiar with UNCF and what it does today. Could you give us just a little background to start off?

Lomax: Sure. United Negro College Fund—and we still use that full name on occasion, but it's largely known by its initials, UNCF, founded in 1944, at the end of World War II. It was founded by two college presidents, Mary McLeod Bethune, Black woman, founder of what is today known as Bethune-Cookman University in Daytona Beach in Florida, and by a Frederick Douglass Patterson, the third president of then-Tuskegee Institute, now Tuskegee University. And Dr. Patterson and Dr. Bethune came together and decided at the end of the war that Black people had fought for a democracy that didn't apply to them. They had proven themselves heroic in the case of the Tuskegee Airmen fighting sorties over Europe. And they felt like when the troops came back, they were going to need to get a great education to prepare them for hopefully more opportunities in the postwar economy. And so they decided to bring all the Black college presidents together and create what would be a United Negro College fundraising organization. They enlisted John D. Rockefeller to lead the first campaign. They raised $750,000 in this united campaign in 1944, equivalent to $10 million today. And in the 76 intervening years we've raised $5 billion and helped 500,000 students earn college degrees. Today, UNCF awards about $100 million dollars in scholarships every year. It supports 37 of the 101 private historically Black colleges. And we are advocates for investment in historically Black colleges and in the post-secondary college education of Black American citizens. That's us in a nutshell.

Fuller: So tell me about the historic role. That was the ambition. That's how it got started. How has it unfolded since the end of World War II? And how has it affected the society broadly, the economy broadly? How do you rate yourself relative to their ambitions?

Lomax: I rate ourselves very high. UNCF, as a social enterprise and historically Black colleges as the medium that we use to achieve our goals, were really designed to ensure that Black folks got the education that would prepare them not for the past, but for the future. And so getting a college degree enabled them to become teachers and go on to medical school and become lawyers and professionals to start businesses. And one of the important things that UNCF promoted, as did historically Black colleges, is that there would be a leadership class in the African American community—a class that was driving social change so that the old stereotypes of Black people as both uneducated and uneducable were challenged by producing highly educated graduates who would go on to take important places in American society. You think about Thurgood Marshall, Martin Luther King, John Lewis, Toni Morrison. And UNCF's role originally was to support historically Black colleges. And beginning in the 1960s our big role was that we were producing significant scholarship support that would help individual students achieve their dreams of a college education. And the biggest business that UNCF has had over the last 20 years has been the scholarship business. Although, we now believe that it is the educational institution that is the lever of change.

Fuller: Well, let's talk about what you just said a little bit, because you mentioned you think the institution is as important to understand in terms of creating success for the student. Over the evolution of UNCF, historically white colleges that would not have been actively recruiting African American students, of course, began to seek diversity and much more widespread enrollment of African Americans outside of historically Black colleges and universities. How did that affect UNCF, and how has it affected your institutions?

Lomax: Well, African Americans are 10-, 12-, 13 percent of the population. Historically Black colleges, which were founded after the Civil War are largely located and the old Confederate States. Although, there are some in Ohio and Pennsylvania and Missouri. Beginning in the 1960s, “white colleges,” if I can use that as a term, began to more significantly open their doors to African Americans, and that provided more opportunity for higher education. We often talk about it as if these doors were opened widely and huge numbers of Black people began to attend elite public and private institutions. And as we know, that's just not the case. If you go out to California where I grew up, the University of California has a very small Black population, although it has been integrated for decades. The Ivy League institutions, their Black enrollments are not equivalent to the percentage of Black people in the population. So we often talk about this competition from white institutions but really the big opportunities that expanded for Black people tended to be in the open enrollment, the city colleges, the community colleges, the two-year institutions, and those have opened up. They have not always been successful environments for African Americans. So HBCUs, our enrollments have grown. When I went to Morehouse a half century ago, there were 1,000 students. There are well over 2,000 students there today. So they haven't all gotten huge but they've certainly increased in enrollment. And today, 250,000 students attend the 101 historically Black colleges. I would say to that, there's another group of institutions which has emerged called “predominantly Black institutions.” And they are defined by the Department of Education as institutions that have 40 percent of their students are African American and 50 percent of their students are Pell-eligible. And those institutions have another quarter of a million students attending them. So what I would say is Black students continue to want to congregate in an environment where they are a significant percentage of the enrollment. And I think that's not because they are unwilling to be an environment where there are white students, but these are environments which tend to be more welcoming and more embracing and less hostile, which as I think our listeners may know there have been real issues of campus climate for Black folks at a predominantly white institutes.

Fuller: So how did that manifest itself in the results for students? I know there's been a lot of research about income outcomes. You made reference earlier to creating gateways to advancement, postgraduate degrees, physicians, lawyers, academics, what did the overall data say?

Lomax: Well, the reality is that Black folks have not achieved academically what their white peers have achieved. I believe that it's about 25 percent or a quarter of all African Americans who are 25 years or older hold a bachelor's degree. That's one in four. For the population writ large it's 35 percent. The greatest predictor of whether you're going to get a college degree is whether your parents have one. Another predictor is your income. And the obstacles are that Black folks, that Black students, still tend to go to underperforming K through 12 schools that don't prepare them for college.

Fuller: Right.

Lomax: And they don't have the financial resources to pay. So that's a kind of a vicious cycle, which has kept us at the bottom of the educational attainment ladder. And I think and it's certainly our view at UNCF that that has had adverse impact on wealth in our community, the quality of our life, and our engagement as citizens. And it also has health impacts. So we want more education and our belief is that the more education that African Americans attain, better for them, better for our communities, but also better for our nation.

Fuller: So UNCF member institutions won't be benefiting from hundreds of years of donations and big endowments. I know you've been very active, as have your member institutions in raising money, and you've had some considerable and highly visible success recently. What's the case you make to today's philanthropists who are so eager for a kind of proof of concept and of a metrics-based giving where they can see that they're getting a return on their philanthropic investment?

Lomax: Yeah. Well, we roll with the punches and if the environment says, “give us a return on investment and it has to be data driven,” we accept that. Most HBCUs are either open enrollment or they are moderately selective. So that they see their mission as helping ambitious students who have academic challenges and financial challenges and little experience with higher education to be successful. What can I say to demonstrate the return on investment? Well, one of the things I can say, that a low-income first-generation student who goes to a historically Black college—within three years of graduation, that student will be earning more than a high school grad, someone who just has a high school diploma. So that's a first step. And then if that individual student stays there for six years, then that student will be earning at about on average $50,000 a year, which will mean that student is no longer low-income and wouldn't qualify for a Pell Grant, which is sort of the general marker for low income students. Ten years after graduation, that student will be earning $71,000 a year and will actually be earning more than a non-first generation, low-income student who graduated from some other college. So you see on the socioeconomics that these institutions are engines of social mobility. What's the number one obstacle to these students succeeding? It's generally resources. These are good schools that are doing a great job with some of the most needy students we have, students who are first generation, low-income, and probably attended a low-performing high school and will require some remediation. But you know what? We're very good at dealing with that student. What we need is additional financial support. And if that student gets just a $5,000 scholarship from UNCF, her graduation rate will go to 70 percent. And what we've seen, students who get full rides at our institutions, as they did if they received a Gates Millennium Scholarship, which was supported by Bill and Melinda Gates, at Spelman College, they had almost a 100 percent graduation rate for all of their Gates scholars. And all of those scholars were Pell-eligible students.

Fuller: Wow. So I'd like to kind of introduce how things have unfolded in the last year in the United States. But before we get there, you've been at UNCF since 2004, I believe. How has the world changed in terms of everything from philanthropy to the engagement of students and the interest level of students in being at a majority minority campus, as opposed to the allure of going to the traditional schools that historically excluded the African Americans?

Lomax: So this has been a journey for the nation and not just for me. So I'm a 72 year old, still hardworking adult. But in 1964, when I was 16 years old and I was making a decision about where I would go to college, life just happened and I wound up going to Morehouse College from Los Angeles, California. And I remember in 1964, my peer classmates, middle class, Black kids whose families had fled the South, saying to me, "Why would you go to Georgia to go to college? You could go stay in Los Angeles and go to UCLA or go to USC." And as it happened, I went to Morehouse. That trek in 1964, back to the South, I was in the minority. Today, California is the second largest feeder into Morehouse and Spelman...

Fuller: Interesting.

Lomax: …University. Because Black kids really have decided, I'd like to see what it's like to be in the majority. And that they'll hear from their peers that attending an HBCU gave them a sense of community, a sense of greater identity, and better prepared them for the world that they will encounter when they graduate. They can be like my grandson, who will be a freshman at Morehouse this year, who is going there because we have a long tradition of attending historically Black colleges in our family, which goes back to the 19th century. And he wants to be a part of that. For other students, it will be that their family members have attended predominantly white institutions and they want to try this other brand. And for other students, who this'll be the first step on the education ladder for them, they think that they'll be more comfortable, they'll get more support by going to an institution where their race really is not held against them.

Fuller: Michael, we're talking in July, 2020, obviously while the Covid-19 pandemic is still affecting the economy broadly and higher education specifically. But more importantly, it's also in the era after the murder of George Floyd, where there's been a real resurgence of discussion and debate about inequality in America, the original sin of America—slavery. How are you thinking about that institutionally? How can you improve the understanding of people about these issues and how do you think that's going to affect UNCF and its member institutions?

Lomax: It's really made me feel even greater commitment and conviction around the strategy, which I have dedicated my life to, which is a strategy that says more education, greater opportunity, better results for individuals and for my own community. Obviously, I think there are a lot of things that we have to do in America to be a more just and equal society. We have to change public policies around criminal justice. We have to address health disparities. We have to provide for greater economic opportunities within the communities where Black people still congregate so that the small businesses can be successful. My strategy, and I believe it's the strategy we are adopting at UNCF, is one that says we want to support great K through 12 education for low-income Black kids, so that when they graduate from high school, they're college-ready, and they can go on to either an HBCU, or a predominantly Black institution, or any other institution, and get a post-secondary degree, because we believe, in the 21st century, that a high school diploma is going to be insufficient, and that there will be additional education required. Some of these young people will get badges and credentials, and they won't get a formal degree, but they'll get certifications that will mean that they can do certain kinds of tech work, or they can do certain kinds of work in health professions. That may be the end of their educational journey, or it just may be the next step that will be followed by further steps that could lead to degrees. I think this is a real big moment for America. It's a big moment. Will we be able to ensure that low income kids and all kids who are in K through 12 will continue to be educated, whether it's in traditional classrooms or virtually? Doesn't look like we're doing a great job on that, but we've still got time. At UNCF, we sent 700 faculty members to programs that enabled them to figure out how to convert their traditional curriculum to online. We think online is going to play a big role in the fall and in the future. We're trying to do everything we can to hold onto kids, to create robust learning environments, to do everything we can to make virtual interesting, exciting, and sticky. What we are seeing is that that philanthropy is beginning to think differently. I've been in this job at UNCF for 16 years. We've raised 3 billion of the 5 billion that we've raised at UNCF over its 76 years during those 16 years I've been here. I've had some very big gifts, a billion dollars from Bill and Melinda Gates, but I've also had a whole lot of very small gifts. What I would say to American philanthropy, you haven't been doing your job when it comes to supporting the educational aspirations of your Black citizens. I think this could be a moment, but I'm trying to make it a movement to see philanthropy giving at levels like Patty Quillin and Reed Hastings, the founder of Netflix, when they made a $120 million gift in June of 2020 to Morehouse College, to Spelman College, and to UNCF. That $120 million as the largest gift from a private individual, not a foundation, private individuals that UNCF has ever received. The $40 million each that went to Morehouse and Spelman, those are the largest private gifts they've ever received. These institutions have been around for 150 years. They need to be getting more gifts like that. All HBCUs do.

Fuller: You're very specific, Dr. Lomax, in your language about encouraging young African Americans to seek higher educational opportunities, to view that as a path to success, understand the consequences. What, beyond repeating that message and bringing it through new channels to people, what other forms of encouragement are needed, and how does that link to philanthropy?

Lomax: I'd like to see us doing even more to give the kids who are in high school today, who, if they stay on the journey, will be the first in their families to go to college, are low-income, is to begin to give them a taste of what it's like to be on a college campus sooner. So either to do that virtually, as we're going to have to do that for the foreseeable future, but to do it in person. I first set foot on a college campus when I was 13 years old, when I visited Tuskegee Institute, when my family was traveling in the Deep South. That was my first time on a Black college campus. It stuck with me for the rest of my life. One of the things I'm a big believer in is, as I've just noted, experiential learning. I'd like to see more young kids, even in high school, getting internships, and beginning to connect the dots between what they learn in a classroom and what they can do as earners in the real world, and certainly on the college campuses, to make sure that our students are getting a chance to both learn and earn. I think connecting what they're learning to what they want to do with their lives, and how they will earn, will keep them on that pathway. But also I think that an education is preparation for civic participation, for a healthier life and for leadership. I'm an English major. I was in the humanities. I believe in liberal education. But I think today, more than ever, as we question our values as a nation and what we believe in, education plays that role as well. If it's preparing people for civic engagement, if it's preparing them for leadership and for careers and for jobs and for making meaningful contributions to the economy, then we're getting everything that we need from our citizens.

Fuller: Certainly, our research here at the Managing the Future of Work project underscores a lot of what you said, everything from the value of work based learning opportunities in a young person's life, the opportunity to get exposed to new ideas and institutions like your trip to Tuskegee, founded by Booker T. Washington and the home of the legendary airmen, just getting exposure to it, whether it's work or advanced learning, and becoming more comfortable, being able to envision yourself doing it is so integral to people's success. Of course, college graduation more than matriculation is hugely correlated with all forms of economic success and societal success, household formation and intact marriages, and the things that we know correlate to good outcomes for people. So Michael, when you're seeking philanthropic support for historically Black colleges, universities, are there specific things you want to target with that money? Because so often philanthropy, it's not just the ability to make the ask, it's engaging a donor in a specific and exciting need that they find motivating.

Lomax: I think if they can envision a young Black student getting the support she needs to live an enriched and more productive life and begin to see that aspiration as important for the nation, that's really important. Black colleges depend too much on grants, and I think they've got to build more assets. So helping them build their endowments is important, and getting them less reliant on borrowing to improve the qualities of the campus and getting philanthropic investment. So one of the things that we really spend a lot of time working on is, "How do we teach Black colleges to fish as opposed to do the fishing for them?" And that means, "How do we build out their capability?" So strengthening their relationships with their alumni and getting alumni to give more, getting more individual gifts. Helping them do a better job on not just attracting students, but packaging students. And that's a term of art, which means making sure that they can pay all their bills. And you do that by understanding what a student and their family can do, but you also have resources to match that with scholarship support. If the public policy is right, then I don't have to spend quite so much time on it. Because if I can get, for example, the federal government to double the Pell Grant. $6,000 is the amount that's currently spent on every low-income student who goes to college in America. Well, that amount isn't keeping pace with inflation. And if we could double that, if we could get that to $12,000 a year, that would really reduce my reliance on philanthropy, but it would also give more students more opportunities to go to the college they want to go to, as opposed to the one that's maybe cheapest and most convenient.

Fuller: Are there other expressions of public policy you'd like to see? Certainly in the presidential primary for the Democratic Party, there are a number of candidates who were throwing around some big numbers about investments in HBCUs.

Lomax: Yeah.

Fuller: Well, I'm interested, your observation about Pell would not be unique to UNCF member institutions, that would be applicable at University of Massachusetts here in Amherst or at Harvard as well, that-

Lomax: I actually think that American higher education has got to be an engine of social and economic mobility more broadly. And what we know about some of our most elite institutions is, they're not really doing as much on the mobility side because so many of their students who come there, come from the very top ranks of American wealth. If I double Pell, I'm helping low income white students, I'm reducing their reliance on debt. Because education is this economic and social escalator, and we want more people to get on that escalator. So yes, I think that's really, really important, but I also believe that the institutions that serve low income minority students are under-resourced in this country. So the coalition we built at UNCF is historically Black colleges, but with tribal colleges and Hispanic serving institutions and institutions that serve Asian and Pacific Islander students. There are hundreds of institutions that serve minority students, and there are millions of students who attend those institutions. And I believe we should invest more in them.

Fuller: So I think many of us are hopeful that 2020 will be the beginning of something that's structural and lasting in terms of bringing about needed change in the country. As you think about your ambitions for UNCF going forward, what are you hoping to accomplish? And what are the things that you'd like to make sure you and your member institutions can get done to advance that purpose and to secure the future for historically Black colleges and universities?

Lomax: Well, so over the short term, I'm trying to raise about $500 million that will largely go to providing incentives for students to return and for strengthening faculty and improving the services. And one of those big services is going to be mental health services on these campuses, because these kids have been traumatized. My goal is to have an endowment at UNCF, which is an endowment that is supporting all 101 historically Black colleges, not just the 37 that are members of UNCF. And my goal is $6 billion because if we have $6 billion, historically Black colleges will be sort of at parity with equivalent institutions in terms of endowment assets. I want to say to all those wealthy philanthropists who are getting the benefit of tax-exempt status by having foundations, invest a little differently, broaden your investment and deepen your investment in historically Black colleges. We're worthy of the investment, and you will have an incredible return in a new generation of African Americans, not at the bottom, but closer to the middle, and who are having productive careers, who are engaged citizens, and are leaders in their communities and for our nation. At UNCF we believe that a mind is a terrible thing to waste but a wonderful thing to invest in.

Fuller: Michael Lomax, CEO of UNCF, thanks for joining us on this Managing the Future of Work podcast from Harvard Business School.

Lomax: Okay. Joe, thank you so much for allowing me to be a part of this wonderful podcast and to just on our own, to have a great conversation, two friends talking about education, the workforce, opportunity, and the future.

Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you listen to podcasts. You can find out more about the Managing the Future of Work project at our website hbs.edu/managing-the-future-of-work/. While you’re there, sign up for our newsletter.