INVESTING IN A MORE EQUITABLE FUTURE

The Historic Fund is a $10M+ venture capital fund of funds created to philanthropically invest capital on behalf of the endowments of Historically Black Colleges and Universities (HBCUs). 

Our nation’s painful history and persisting racial inequities have contributed to significant deficiencies in the resources channeled to educating Black students. HBCUs were founded during slavery and segregation, when Black Americans were denied access to virtually all institutions of higher learning. Their very existence stems from a system that did not prioritize - and in many cases actively championed against - the nurturing of Black minds. 

Today, the legacy of this injustice is evident in the substantial endowment gap between HBCUs and their peer educational institutions. Endowments support universities’ teaching, research, and public service missions and provide financial flexibility, security and some level of operational certainty. As they grow, endowments give universities greater freedom and resources to withstand economic turbulence and educate leaders who can solve the problems of the moment and innovate for a better future. Currently, public HBCUs are endowed with only $7,625 per student compared to an average of $25,390 per student at public colleges and universities. The discrepancy is even starker at private institutions, with private HBCUs endowed with only $25,390 per student compared to the national private institution average of $184,409.¹ This systemic underfunding inhibits HBCUs’ ability to offer financial aid and puts Black families under immense financial pressure. Research indicates that easing this burden on students and their families requires at least $53 billion in HBCU endowments.²

Over the last 30 years, the returns provided by venture capital funds have been responsible for a disproportionate share of university endowment profits.  Yet most HBCUs have not had large enough endowments to enable them to meaningfully invest in (and generate returns from) venture capital funds and other alternative asset classes. This has resulted in lower annual investment returns for HBCU endowments compared to the endowments of predominantly white institutions.

The Historic Fund is a unique philanthropic initiative that invites selected HBCUs to become limited partners in venture capital funds without having to invest their own assets. The Historic Fund provides selected HBCUs with both Limited Partner interests (subscriptions into venture funds) and the cash grants necessary to fund these investments. By   pairing allocations  in top venture funds together with the means to pay for them, we hope to create meaningful, enduring value for HBCUs and their endowments. The schools will function as traditional limited partners in participating venture capital funds, and will be free to use the returns as they wish.

In spite of a massive funding gap, HBCUs have consistently shown considerable resilience, resourcefulness and impact. They have put their limited assets to work to make an outsized impact on the education of African Americans, enrolling twice as many Pell Grant eligible students as other institutions.³ Despite making up only 3% of all higher education institutions in the US, HBCUs have conveyed 17% of all bachelor’s degrees and 24% of all STEM bachelor’s degrees to Black students in the country.⁴ They have graduated 40% of  the country’s Black engineers, 40% of Black Congress members, 50% of Black lawyers, and 80% of Black judges.⁵ This monumental contribution to the education of Black Americans explains why HBCUs boast a mean mobility rate (the fraction of a school’s students who come from a family in the bottom fifth of the income distribution and end up in the top fifth of the income distribution) of 3%, nearly double the national average.⁶

Our coalition of venture capital firms recognizes that racial equity is crucially important to our nation’s future. Our industry has not historically been the most inclusive nor mindful of its broader social context. The Historic Fund is an effort to put venture capital to work to support the tremendous legacy and continued efforts of HBCUs to level the playing field and fuel the education and advancement of the Black community.  Our contributors are excited to use The Historic Fund as a mechanism to not only support HBCUs financially, but also to give them a voice and a stake in the venture capital community. We make this investment in them because we believe the returns to our society at large will be immense.

Our HBCU Limited Partners

  • Benedict College

  • Bennett College

  • Fisk University

  • Florida A&M University

  • Hampton University

  • Morehouse College

  • Virginia State University

  • Virginia Union University

  • Xavier University of Louisiana

PARTICIPANTS

  • Dr. Regina Benjamin

    Founder and CEO of BayouClinic; 18th United States Surgeon General (2009- 2013); and Founding Partner of First Close Partners.

  • Ken Chenault

    Managing Director at General Catalyst and co-founder of OneTen, a coalition of leading executives coming together to upskill, hire and advance one million Black Americans.

  • Josh Kopelman

    Founding Partner of First Round Capital and First Close Partners.

  • Megan Maloney

    Managing Partner at Dria Ventures

  • Samson Mesele

    Partner and General Counsel at Union Square Ventures

  • Ekwutozia Nwabuzor

    Counsel, Investment Management & The Tech Group at Lowenstein Sandler

  • Adanma Raymond

    Executive Director of The Historic Fund

  • Ed Zimmerman

    Co-founder and Chair, the Tech Group at Lowenstein Sandler; and Founding Partner of First Close Partners

Our Supporters