What the Collapse of a Major HBCU Donation Tells Us About Structural Inequities in Philanthropy
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Lee Hall at Florida A&M University. photo: JHVEPhoto/shutterstock
Last month, I first started tracking a strange story coming out of Florida A&M University. Florida A&M (FAMU) is an HBCU founded back in 1887 whose alumni include tennis great Althea Gibson, film producer Will Packer and Florida politician Andrew Gillum. But in recent months, FAMU has been in the news for different reasons.
A young man by the name of Gregory Gerami, 30, announced a record-breaking $237 million gift to FAMU on May 4, publicly revealing the donation during the 2024 commencement ceremony, flanked by FAMU President Larry Robinson and other university brass. “And by the way, the money is in the bank,” Gerami said as part of his speech, just as the O’Jays “For the Love of Money” decrescendoed.
The gift had all the trappings of a true feel-good story. A huge gift to an HBCU. A young black donor coming onto the scene seemingly like Robert F. Smith did at Morehouse, or Frank Baker did at FAMU earlier. “It’s up to us to actually train the younger generations and show them the power it has for our community,” New York businessman Baker told me after his $1.2 million gift to FAMU in 2022.
Gerami’s gift would have dwarfed that, but sadly for FAMU this time, all was not how it appeared. Following his May 4 announcement, it soon became apparent that the money wasn’t “in the bank” after all.
Gerami is the owner of the obscure Batterson Farms Corporation, a privately owned hydroponic farming and hemp plastic company with a barebones website and only two listed staff: himself and Kim Abbott, a former Birmingham City Council member, who was listed, she says incorrectly, as co-CEO. “I’m a stay-at-home mom. I would have never been able to be a CEO of anything,” she said when confronted about her role at the company.
Then there’s the dubious vehicle behind the gift, the Isaac Batterson Family 7th Trust, which donated 14 million shares of stock valued at nearly $240 million to FAMU Foundation. The trust has no web presence and no publicly available tax records.
There’s also the question of who the heck Isaac Batterson is. According to the Myrtle Beach Sun News, Gerami's adopted family is the source of much of his wealth, through a combination of inheritance and trust money. Isaac Batterson was the founder of a small town in Texas.
In the past month, after initial reporting by local press and HBCU alum Jerell Blakeley, the story was eventually picked up by the likes of NPR and the Associated Press. FAMU says the gift is now on pause as it undertakes a third-party investigation. As for Gerami, he maintains that his gift is legitimate and that it will all work out in the end.
The Gerami saga has shaped up to be one of the strangest mega-gift stories in recent memory. But while most coverage focused on the lack of vetting from university brass, dug into Gerami’s hemp business, or breathlessly wondered how so many people could have been duped, I think there are other important takeaways here, especially for philanthropy and certain realities that the sector needs to be ready to confront. Here are a few.
The racial wealth gap persists in philanthropy and beyond
When I found out about Gregory Gerami, I started googling everything I could find out about him. Besides a short bio on his company website, which sometimes even speaks about his business in exploratory terms (“He has already identified the ideal tract of land and warehouse space for this venture”), there’s not much else out there about him, and there was even less out there a month ago. I was genuinely curious to find out about this man and his story, but the more I searched, the less things added up.
Even the fact that Gerami seemed to tap some of his wealth from the hemp business seemed far-fetched given the vast racial disparity between who has historically been punished and incarcerated for marijuana and who is now making vast profits in that growing market — projected to expand from $57.18 billion in 2023 to $444.34 billion by 2030. Black cannabis entrepreneurs account for just 5% of industry ownership, according to the New York Office of Cannabis Management. Gerami’s own website seems to play on this reality: “With a bold vision for the future, Gerami is poised to establish the largest African-American commercial hydroponic warehouse in West Texas, situated in Muleshoe.”
All that to say, the idea that a young, Black hemp farmer could come out of nowhere like Gerami and field nearly $240 million for a gift to an HBCU in need was always fantastic. Meanwhile, we’re regularly treated to tales of young, mostly white entrepreneurs amassing that kind of money and putting portions of it toward philanthropy. This is what it means to actually have a wealth gap.
Institutional malfeasance is bad, structural inequality is worse
That wealth gap, and the resulting philanthropy gap, is the main reason why there’s also a huge endowment gap between predominantly white institutions (PWIs) and HBCUs. The top 10 HBCUs, including Howard and Spelman, have combined total endowment assets of around $2.2 billion. As of October 31, 2023, the FAMU Foundation endowment was $104,993,207 — supporting a student body of about 9,000 students. Compare that to Harvard’s endowment alone, at over $50 billion.
The gaps also extend to public funding. Two years ago, six FAMU students filed a class action lawsuit against the state of Florida and the board of governors of the state university system. Both FAMU and University of Florida are land-grant research institutions. But in 2020, FAMU’s $123 million in state appropriations totaled about $13,000 per student, compared to the University of Florida’s $15,600 in state funding per student, according to Forbes. Lawyers argue that if FAMU had been funded at the same level per student between 1987 and 2020, it should have received an additional $1.3 billion from the state.
While it’s easy to paint the Gerami story as a basic case of institutional malfeasance, no one’s talking about the broader structural malfeasances that form the backdrop for it. It’s also sometimes true that when someone wants something to be true so badly, they believe it, even against their better judgment. This is what came to mind when hearing FAMU President Larry Robinson’s words a few weeks ago.
“I saw in this unprecedented gift the potential to serve our students and our athletic programs in ways unimaginable at that time,” Robinson told university trustees in mid-May, according to AP. “I wanted it to be real and ignored the warning signs along the way.”
An HBCU alum speaks: a “testament to disparities in higher education philanthropy”
Howard University alum Jerell Blakeley was one of the first people ringing the alarm bells about Gerami and FAMU. Blakeley’s not a journalist by trade, but his informal investigation published in Substack blogs and a flurry of daily X posts caught the attention of former CNN contributor Roland Martin. A staffer at Indiana State Teachers Association and an adjunct professor at Rutgers School of Management and Labor Relations, Blakeley calls the whole saga a “fascinating testament to disparities in higher education philanthropy.”
He noted that Gerami’s gift, or at least the promise of it, would’ve been the largest gift in Black higher education philanthropy. But when it comes to higher education overall, it wouldn’t have been as big of a deal, more a drop in the bucket. Blakeley noted Mike Bloomberg’s $2 billion in giving to Johns Hopkins through the years, an example of the kind of transformative gifts that can happen in higher education philanthropy, focused on a single institution.
“I think that is a sad testament to the historical underfunding and the lack of attraction that HBCUs have received from monied interests in America,” Blakeley said. “Just imagine what FAMU could do with those resources. It would be remarkable.”
Blakeley is of the opinion that given the circumstances, HBCUs have actually punched above their weight, doing more with less: Spelman and Bennett College, two all-women HBCUs he mentioned, produce more Black American Ph.Ds than all the Seven Sisters colleges combined.
“I think FAMU has to acknowledge the institutional failures and processes that lead to this debacle and folks should do the right thing and take responsibility for this PR disaster,” he said. “It’s unacceptable. FAMU is too important to have its credibility lessened like this. All HBCUs are too important.”
A deep need for HBCU funding remains, despite some recent bright spots
It’s not all bad news on the HBCU front. As we’ve reported, there appears to be a modest uptick in support for HBCUs from individual donors of late. Since 2020, a handful of megadonors have stepped up, including none other than MacKenzie Scott, who has given eight-figure gifts to institutions including Prairie View A&M University, North Carolina Agricultural and Technical State University and Bowie State University. And at the start of the year, Spelman College announced its largest gift ever, $100 million from Ronda Stryker and her husband, William Johnston.
I have also been tracking some of the Black donors engaged in this space, from Oprah Winfrey (who has given at least $25 million to Morehouse through the years) and Robert F. Smith, to film director Spike Lee. Looking at the next generation, NBA superstar Steph Curry made a seven-figure donation in 2019 to Howard University to launch the first-ever men’s and women’s Division-I golf program in its 152-year history.
When I spoke to Smith in 2019, he made it clear that one of his biggest goals is to eliminate the loan debt burden at HBCUs. “That will probably liberate the Black community more effectively than anything else I could think about,” Smith told me at the time.
But these headlining gifts from Black donors and others aren’t the only kind of support that will sustain HBCUs. A common refrain I’ve heard from scholars and leaders in Black philanthropy, whether that’s Valaida Fullwood, an architect of Black Philanthropy Month in August, or Tyrone Freeman at the Lilly Family School of Philanthropy, is that the story of Black philanthropy isn’t just one of major individual donors, but of ordinary Black men and women giving all that they could, when they could.
When it was established, the Smithsonian National Museum of African American History and Culture received nearly three-quarters of its initial individual gifts from Black Americans. Notably, $4 million alone came in gifts of less than $1,000. Then there’s small-donor support for other Black institutions, whether it be the Black church or civil rights organizations, Black giving circles, or even Juneteenth itself in Texas, which were all the consequence of collective action.
So while $237 million appearing like manna from heaven might be too good to be true given the structural realities of wealth in America, it’s important to keep our feet firmly planted on the ground, supporting these institutions however we can, whenever we can.
