Where Does Revenue to the United Negro College Fund (UNCF) Go?

The United Negro College Fund (UNCF) is one of the few non-profits experiencing a steep decline in revenue while keeping their expenses relatively constant resulting in decline in net assets over the past few years (in millions):

                              2014          2015          2016          2017          2018 

Total Revenue     $221          $250          $ 80          $ 89           $ 75

Total Expenses    $171          $180           $184         $172          $161

Rev-Exp                 $ 50            $ 70          -$104      -$ 83        -$ 86

Net Assets             $774          $824           $721         $637        $558

Grants Awarded    $124          $132           $138         $130        $117

A non-profit, tax-exempt 501 (c) (3), UNCF funds scholarships for students for 37 private historically black colleges and universities in addition to assisting the colleges and universities.

As illustrated above, revenue has declined to about 30% of what it was in 2015. However, UNCF has remained committed to students and higher learning by continuing to keep grants consistent at about $130 million annually and keeping total expenses consistent from year-to year.  What exactly are those expenses?  The IRS Form 990 (2018 for the year ending March 31, 2019) reported $161 million in expenses categorized as follows:

• $117 million (156% of revenue):  Grants
• $ 21 million (28% of revenue):  Compensation
• $  9 million (12% of revenue):  Office-Related Expenses
• $  7 million (9% of revenue):  Fees for Services (primarily management and investment)
• $  6 million (8% of revenue):  Travel and Conferences
• $  1 million (1% of revenue):  Other Expenses (bad debt, advertising and promotion)

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 28: Compensation

-$ 12:  Office-Related Expenses

-$  9:  Fees for Services

-$  8:  Travel and Conferences

-$  1:  Other Expenses

-$ 58:  Subtotal Organization Expenses

$  42: Remaining Revenue

-$156:  Grants

-$114:  Excess Expenses over Revenue (covered by the general fund)

As illustrated above, for every $100 in revenue collected in 2018, the organization spent $214.  $58 out of every $100 covered organization expenses leaving $42. UNCF awarded $156 in grants for every $100 received in 2018, relying on the general fund to cover the shortfall. As a result, net assets decreased from $637 million at the beginning of the year to $558 million at year-end. It is important to note the UNCF still has more than a half billion dollars in net assets but it is also important to note that net assets were $824 million just three years prior (2015).

UNCF’s mission is to support the 37 member colleges and universities and the students who attend these schools and their commitment by way of grants has not weakened with the decline in revenue.

GRANTS

Grants consist of those awarded to domestic organizations ($80 million) and domestic individuals ($37 million).  49 grants greater than $5,000 were awarded to other 501 (c) (3)’s with the 11 largest recipients listed below:

• $25,416,653:  Hispanic Scholarship Fund for special event
• $12,119,170:  Asian & Pacific Islander American Scholars for grants and scholarships
• $ 8,859,114:  American Indian Graduate Center Scholar for grants and scholarships
• $ 2,261,523:  Spellman College for grants and scholarships
• $ 1,984,589:  Xavier University for grants and scholarships
• $ 1,813,106:  Morehouse College for grants and scholarships
• $ 1,445,972:  Clark Atlanta University for grants and scholarships
• $ 1,294,999:  Claflin University for grants and scholarships
• $ 1,131,544:  Dillard University for grants and scholarships
• $ 1,070,805:  Benedict College for grants and scholarships
• $ 1,029,420:  Bennett College for Women for grants and scholarships

$37 million was distributed as grants to 5,878 individuals for various scholarships, stipends, honorariums, and fellowships with an average grant of $6,300.

COMPENSATION

Headquartered in Washington, CD, UNCF has a 31 members of an independent voting body. On the Form 990, 38 members are listed (because of overlap of terms) of which 25 (66%) are male while 13 (34%) are female.

UNCF reported having 255 employees who received $21 million in compensation, which equates to an average compensation of $79,000. 48 employees received more than $100,000 in compensation with the most highly compensated employee being the President and CEO, Michael L Lomax who received $838,291 in compensation.

To read the IRS Form 990 (2018 for the year ending March 31, 2019), click here.