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Black College Bets On African Land, But Threatens African Lives

August 18, 2011
News One

By Johan Thomas


Spelman College’s endowment fund was reportedly worth more than $350 million in 2010, making it the largest private endowment of all historically black colleges and universities, and second only to Howard University in largest overall endowment.

Though Spelman’s endowment is only a fraction of those at predominantly white universities like Harvard, whose $26 billion fund top all U.S. colleges, the fund’s impressive growth is a testament to its success cultivating a host of alternative investment strategies.

Typically, most schools rely on financial instruments like government securities that carry little risk, provide a secure revenue stream, but ultimately offer a small return.

In contrast, Spelman’s endowment has posted better than average returns by dedicating much of its fund to private equity.

And it is exactly these investments that have watchdog groups scrutinizing the private endowment of America’s first black female college, putting its fund raising efforts, its mission and moral integrity into question.

According to “Special Investigation: Understanding Land Investment Deals In Africa,” a report released earlier this summer by the Oakland Institute—a policy think-tank focused on social and environmental issues—Spelman and other U.S. universities have been investing a part of their endowments in large land purchases in Africa.

What speculators describe as a new, transnational real estate market in Africa, watchdog groups are calling “land grabs,” highlighting the ways these large land purchases are displacing African people, uprooting their culture and destroying their land.

China and Middle Eastern nations are reportedly accelerating this market, buying land and using industrial farming methods to supplement their countries’ own food shortfalls.

Still, much of these deals are being brokered with U.S. and European capital. In Spelman’s case, London-based Emergent Asset Management—said to be the largest speculative fund investing in African industrial agriculture—has the college invested in large tracts of African land with its African AgriLand Fund, which Emergent is selling as a way of securing food production for the developing world.

Officials at the Oakland Institute say other wise.

“While Emergent and other funds  talk about social good and socially responsible investments,their promise of jobs and food security is just a PR tactic,” says Executive Director of the Oakland Institute Anuradha Mittal. “These investments are really about high returns based on arbitrage opportunities.”

According to Mittal, these funds promise returns as high as 20-40 percent.

It is an investment logic Emergent’s CEO Susan Payne was quoted describing in Black Agenda Report:“In South Africa and Sub Saharan Africa the cost of agriland… that we’re buying is 1/7th of the price of similar land in Argentina, Brazil and America… We could be moronic and not grow anything and we think it will make money over the next decade.”

And still, the Oakland Institute and other organizations say these deals threaten food security with methods of farming  that not only pollute the local land and water supply, but also destroy the sustainable, small-scale farming operation of the natives, who then become dependent on foreign nations and multinational corporations for rations of agriculture they once produced themselves.

Compounding this demand are weak land rights and eager African leaders ready to fork over prime real estate for a quick buck and the possibility of forging relationships with the developing world.

These cozy, neo-colonial relationships echo the history of slavery in America and European colonialism in Africa, which over time has crippled the economic vitality and independence of Black people around the world, forcing Black people to work with or rely on white capital and capitalists for their survival.

In fact, some believe Spelman’s own relationship with one of America’s wealthiest families—the Rockefellers—sowed the seeds for the success of its endowment.

In 1881, Sophia B. Packard and Harris E. Giles founded the Atlanta Baptist Female Seminary in the basement of an Atlanta church with a mere $100 donation. A year later, the two educators and Baptist missionaries from New England had garnered the support of John. D. Rockefeller, whose $250 pledge helped move the college from a basement to a nine-acres plot of land with five building for classrooms and dorms.

By 1884, Rockefeller had settled the debt on the land and the Atlanta Baptist Female Seminary had changed its name to Spelman Seminary in honor of Laura Spelman, Rockefeller’s wife. Given today’s estimates by the Common Fund Institute, the Rockefellers’ donations have grown to nearly $60 million, which means $290 million has accrued from other sources.

Starting in the 1970’s, Spelman began broadening its endowment efforts, launching its first formal fund-raising campaign, hiring a professional fund-raising firm, and managers with extensive contacts in big business.

In 1982, Spelman founded its Special Ventures Fund with the goal of investing part of the endowment in private capital. The funds first commitment, a $2 million investment to a venture capital firm returned a $23 million check eight years later, according to a Common Fund Institute case study on Spelman’s endowment.

From then on, Spelman committed to a growth strategy, moving the bulk of its money from investments like government bonds to private equity. In 1988, the college allocated a mere two percent of its endowment to private equity. By 2008, the fund dedicated more than 20 percent to these high-risk, high-reward investments.

Both NewsOne and the Oakland Institute reached out to Spelman for comment, but college officials did not respond.

“Given what we know about the social, economic, and environmental impacts of these land investments, it’s appalling that institutions of higher learning would invest in private equity and hedge funds investing in these deals,” Mittal said.

Mittal says it’s all the more shocking that an African-American college like Spelman would have so little empathy for Africans in a quest to swell its own coffers.

“Emergent Asset Management’s… sole purpose is to secure high returns, even at the cost of livelihoods and food security of African nations,” Mittal says.