The Context
For those unfamiliar with the history of the class action lawsuit in the United States, Arizona State University legal scholar David Marcus writes extensively about its formation and outcomes as an “aggregate litigation” tool on “behalf of an undifferentiated groups.” Traditionally used as a means to hold corporations accountable for harmful practices, the Class Action lawsuit in principle serves as a means to make whole those damaged or harmed by the corporate practices. In practice, it has resulted in relatively small amounts of financial renumeration for victims, but large administrative financial wins for the legal teams. This is what is increasingly happening to HBCUs.
According to publicly available data there are 147 registered 501c(3) non-profits throughout the country with a mission or title specific to HBCUs. These third-party entities engage in fundraising activities for scholarship giving and capacity and economic development activities as intermediary organizations. Increasingly they have been leveraging HBCUs as Class Action victims needing representation. These non-profit organizations solicit resources from individuals and corporations on “behalf of the undifferentiated group” of HBCUs, frequently doing so while failing to recognize the unique needs and individuality of each campus.
These registered non-profit organizations dedicated to “advocating” for and raising scholarship dollars on the behalf of HBCUs between 2024-2025 collected $243,299,682 in donations, program service fees, and membership fees. IRS data, which does not include the institution affiliated foundations or institutionally affiliated alumni associations, indicates that of the 147 registered organizations they have endowments valued at nearly $200 million, when the average HBCU endowment is $60,079,549.
Between 2024 and 2025, according to federal tax documents, 56 of 147 organizations (38%) submitted no federal tax records in the form of 990s in two to three years, which is problematic for transparency as to how much is being raised in the name of HBCUs; 46 of the organizations (31%) submitted 990 documents but reported no collections or revenue for two years despite still being operational; and of those organizations with contributions and/or program service revenue reported (29%), only 17 of them reported distributions of funds to HBCUs directly. These 17 organizations reportedly distributed $51,349,692 in direct funding through scholarships or grants to our nation’s HBCUs yet spent $274,007,375 in operational support for their own staff salaries, travel, marketing, or lobbying activities. They have collectively reported spending 116% more money on the apparatus of appearing to do good than their actual distributions. For example, one organization reported expending $101,000 for an internship program that yielded them $330,000 in revenue. Another organization provided Part III (Program Service Accomplishments) narrative claiming distribution of $26 million in scholarships in 2025 despite the details of their 990s reflecting only $729,986 in distributions.
The depth of the problem as to how much funding has been siphoned from HBCUs in their name is unknown, but a brief longitudinal analysis of available 990s documents since 2015, indicates these organizations have collected over $2.2 billion in contributions in the name of HBCUs with the same 990 tax records reporting only $453,274,521 has been given back to HBCUs (20.6%).
Just like a Class Action settlement after the operational costs of legal firms are collected, remaining funds were allocated to HBCUs. Between 2024-2025 tax years only 21.1% of the funds collected in the name of HBCUs were distributed to HBCUs. For every dollar siphoned from HBCUs, our institutions fail to benefit from the compounded interest of billions in contributions. As suggested in the basic math of the Class Action philanthropy enterprise, HBCUs themselves receive a fraction, but in return they are expected to comply with an unspoken obligation to stay in the designated lane and in some cases allocate institutional resources toward “sponsored” activities managed by third-party organizations. This is not advocacy. It is a patronage structure dressed in the language of equity.
Call to Action
Since 2015 QEM Network has been awarded $16,042,968 from federal agencies to provide free technical assistance that has allowed HBCUs to directly acquire $429,974,933 in federal grants for themselves. So, I say this plainly: HBCUs do not need intermediaries to speak for them, to fundraise in their name, or to manage their liberation on commission. They are more than capable of funding acquisition. For more than half a century, third-party organizations have built entire business models around “advocating” for HBCUs while quietly hoarding the majority of the resources they collect in the institutions’ names. They deploy HBCU histories, their students’ struggles, and their presidents’ narratives as marketing collateral, then return a fraction of the proceeds and call it philanthropy. This is not partnership. It is extraction.
HBCUs are not class action victims to be aggregated into someone else’s revenue stream. They are sovereign institutions with our own missions, their own leaders, and their own capacity to cultivate relationships with donors who actually want to invest in their work, not in someone else’s overhead. Every dollar that is siphoned through an intermediary “for HBCUs” is a dollar that does not compound in HBCU endowments, does not pay HBCU faculty, and does not strengthen HBCU infrastructure. The math is simple; the harm is not.
So here is the call to action:
- HBCU presidents, boards, and advancement leaders must stop automatically legitimizing any group claiming to “represent” HBCUs without transparent, audited proof of direct institutional benefit. The burden of proof must shift: if an entity raises money in our name, it must publicly show, annually and in detail, how much funding reaches campuses and under what terms.
- HBCU communities must reclaim control of their philanthropic narratives so donors hear directly from leadership, students, and alumni. Institutions should insist on direct giving, direct reporting, and direct accountability; donors who want to support HBCUs should fund institutions themselves, not organizations that spend more on branding than on our campuses.
- Boards should adopt clear policies governing engagement with third-party “HBCU-focused” nonprofits, including mandatory data-sharing and reporting, alongside clauses that protect institutional autonomy.
- Donors and corporate partners must face an uncomfortable truth: routing giving through intermediaries that retain most funds raised in HBCUs’ names does not remedy inequity; it subsidizes it. Those who believe HBCUs are central to the nation’s future should fund them directly and require that any group claiming to advocate for HBCUs be accountable first to the institutions themselves.
HBCUs have survived state and federal underfunding, legal discrimination, and public neglect. They are not a backdrop for someone else’s fundraising narrative. Our nation’s HBCUs have the right to own their stories, their strategies, and their own direct resource streams. This fiscal year should not begin with another campaign in their name that flows everywhere except their campuses. HBCUs have been polite long enough. It is time for as much direct investment into our nation’s HBCUs.
