Inside an Investment to Advance Black Economic Mobility: a Q&A with Nicholas Pelzer

In your own words, what is the HBCU Transformation Project?

Nicholas: This initiative is designed to improve the sustainability of HBCUs by focusing on their core capabilities to improve enrollment, retention, graduation, and student support. The project was created and is propelled by three partners — TMCF, UNCF, and Ed Advancement — organizations that have a long history and experience working with HBCUs and that act as intermediaries to the schools. Not only will the HBCU Transformation Project help individual schools and their students, in the long term it aims to increase Black wealth and boost communities around the schools.

How do you see the HBCU Transformation Project connecting to Blue Meridian’s mission to improve economic and social mobility?

Nicholas: I can’t think of any better driver for economic and social mobility than education. And for Black people in the US, HBCUs offer an education designed with their particular history and context in mind. Even with a century of underfunding, HBCUs outperform Predominantly White Institutions in creating economic mobility for Black students. Given these data, we had to consider the vast potential of these institutions if they received the support they needed and deserved. Through investment in these institutions Blue Meridian has the chance to further our mission to create economic mobility in the US in a rather unique way, in the long term, and at scale.

This Project calls for Blue Meridian to work with three intermediaries and dozens of participating HBCUs. How will Blue Meridian’s investment support these different types of partners to increase economic opportunity?

Nicholas: We partnered with and provided financial support to UNCF and TMCF because these two organizations have been long-standing, trusted advocates, and fundraisers for HBCUs. By leveraging these relationships, we created a method to collaborate with public and private HBCUs as a network rather than separately. The third intermediary, Ed Advancement, is essential because it implements shared services practices and tools which are creating scalable infrastructure, operations, and technology-focused solutions to this network of colleges and universities.

I like to think about Blue Meridian’s support in three big buckets: one, the direct financial investment we are providing to UNCF, TMCF, and Ed Advancement to build their capacity to support HBCUs; two, the funding for the participating schools through direct support and via leveraging shared technical services; and three, creating space for strategic alignment with every partner to advance HBCUs’ long-term growth and success.

I want to add a bit more about that second bucket. Direct funding to the 40 participating HBCUs is strengthening their internal capacity and operations. It will also increase access to technology-based services, like data tracking systems for reporting and automated AI chatbots that turn student interest in an HBCU into enrollment. These innovations will build HBCUs’ capacity to support students and improve their outcomes.

Blue Meridian aims to give leaders the support they need to dream big. What are some of the most ambitious goals for this recent investment in the HBCU Transformation Project?

Nicholas: I hope that we encouraged the leadership teams of the Transformation Project partners to think aspirationally. Together, we agreed to a set of goals for what will be achieved by 2026, which serve as milestones for Blue Meridian’s investment. For example, the Project aims to increase enrollment by 90,000 students, a 40 percent increase over 2020. The Project is also hoping to increase the average graduation rate by about 8 percentage points, from 32 to 46 percent, and increase the number of graduates by about 54 percent. That’s a potential net increase of 22,000 bachelor’s, master’s, and doctoral degrees over the life of the initiative. In other words, the HBCU Transformation Project hopes to support a positive change in life trajectories for 22,000 people.

The Project works toward these goals in the hope that it can strengthen collaboration, fundraising, performance management, and technology infrastructure at each participating HBCU. Each of these avenues serves as a pathway to the larger goals at the end of the investment.

The $184 million investment is Blue Meridian’s largest to date in a single strategy. With Blue Meridian investments, we hope to meet the scale of the problem, and this investment does just that. Blue Meridian and the three intermediaries hope our efforts will motivate other philanthropists and funders to contribute in their own way, so we can collectively give HBCUs the funding they need to increase economic mobility.

This investment has an interesting backstory. Blue Meridian first invested in HBCUs at the height of the COVID-19 pandemic to help with immediate funding needs. How has our investment evolved from the early pandemic support to the HBCU Transformation Project today?

Nicholas: The COVID pandemic negatively affected all of higher education. But HBCUs were disproportionately impacted. To create balance, Blue Meridian invested $15 million in HBCU crisis support.

At that time, we wanted to make sure HBCU colleges and universities had sufficient stability to survive the pandemic. In providing this support, we learned the role that UNCF, TMCF, and Ed Advancement could play in building and strengthening the relationship between HBCUs. We saw that leveraging those organizations to deploy capital would be efficient and effective and positive for the academic institutions. The COVID support became our proof of concept.

Following that, we shifted from crisis support to an investment in HBCUs for long-term success, which we saw as an opportunity to scale the work of the three partners and meet the problem of underfunding at full scale. Through this investment, we could tackle challenges across several different areas, including capacity building, HBCU value proposition, student retention, and graduation rates.

Can you explain the innovations that the HBCU Transformation Project is using to address systemic improvements for the institutions involved? How might these approaches serve as a model for all higher-education institutions?

Nicholas: I’d say the structure of the Project’s investment has been innovative in a few ways. Through Blue Meridian’s partnership with the intermediaries, each participating HBCU performed its own self-assessment to determine its needs across enrollment, retention, sustainability, and value proposition. Then, we funded those schools to tackle a series of goals designed to help them move the needle on the gaps they self-identified. This approach differs from a lot of traditional funding relationships, which often are designed to fund a particular project or track of work a funder has determined and leads.

I think another innovative element is that the Project leans into the concept of the network and shared services, leveraging technology to improve processes in a cost-effective way. For example, launching AI chatbots to engage students. We’re also looking into ways to leverage technology to support students and families applying for financial aid. With these supports, schools won’t have to hire new staff or overburden existing staff. Instead, there are high quality streamlined solutions delivered to students through proven technology.

We’re already seeing the positive effects of these innovations. Enrollment at schools such as South Carolina State University and Claflin University has increased. Students at Morehouse are using AI to find the right interventions for them — and data shows they’re working.

In all this change, the Project tries to balance the needs of each school with smart options to replace duplicative administrative work. These shared services and supports are helping HBCUs work more efficiently without sacrificing quality.

As a Black man with a long history working in the education sector, what has it been like to be involved with the HBCU Transformation Project?

Nicholas: The truth is, I didn’t go to an HBCU because I heard — and at the time believed — many of the negative narratives and stereotypes associated with HBCUs. I heard there wouldn’t be enough scholarship money. I heard the quality of education might not be as good as other institutions. I regret that I listened to what I now know is incorrect and harmful information. Today, I understand the unique experience that HBCUs provide — and frankly, I’m ashamed that as young man I didn’t try to learn firsthand about schools that were made for me.

Therefore, my personal connection to this work is about continuing to change that narrative: making sure other young and talented people can find a home on these campuses and access opportunities they won’t find anywhere else. As Blue Meridian invests in HBCUs for their long-term success as institutions, we also hope that more people nationwide will understand the unique role HBCUs play in educating Black Americans such as helping a disproportionate number of Black doctors and other professionals succeed.

What role can philanthropy play in the success of the HBCU Transformation Project?

Nicholas: I think the Project is designed to allow funders to support the underlying capabilities of a whole network of schools. The collective focus on outcomes helps each HBCU fill its individual needs and reach its goals more effectively.  

I’m proud of the investment Blue Meridian has made — and excited about the early signs of success. I’m hopeful this will encourage other funders to make similar investments. HBCUs need even more support for their infrastructure, facilities, and the ways they serve their students.