Netflix co-founder Reed Hastings and his wife, Patty Quillin, have donated $120 million to historically black colleges and universities (HBCUs). The donation will be divided three ways between the United Negro College Fund and two historically black colleges, Spelman and Morehouse, both in Atlanta. Hastings called on other wealthy tech entrepreneurs to do the same as one way to begin addressing systemic racial inequality. 

Hastings has a history of supporting education for people of color, and serves on the board of Kipp Public Charter Schools, which serves mostly black and Latinx communities. He credits the idea for this new donation to fellow board member and United Negro College Fund CEO Michael Lomax. "He helped me realize that there are many good places to donate, but the HBCUs in America are 150 years old, very resilient, and producing amazing numbers of black graduates," he said in a CNBC interview.

A donation was already in the works after Hastings and Quillin visited some HBCUs at Lomax's invitation. Then came the events of the past few months. "The typical black family knows many more Covid victims than the typical white family, because it has hit so hard in the black community," Hastings said. "And then you have the police violence and killings. And so the amount of tragedy really did get us to focus and say, 'Let's do something now that would be supportive of these great institutions and give people some sense of hope.'"

Endowments half the size of other colleges'

HBCUs generally suffer from funding inequality that mirrors the economic inequality of black people in the United States. According to CNBC, the median endowment for historically black colleges and universities is just $15.7 million, less than half that of their non-HBCU counterparts. The gap is even wider -- a lot wider -- when you compare venerable and prestigious HBCUs with the Ivy League. Spelman, for example, has an endowment of around $390 million, while Harvard's is more than 10 times larger, at around $4 billion, according to The New York Times.

Graduates of the Ivy League and other predominantly white prestigious institutions such as Stanford are well represented among successful entrepreneurs. Most tend to donate to their own alma maters -- for example, former New York City mayor Michael Bloomberg has donated about $3 billion to Johns Hopkins University. Hastings himself made most of his donations to the college he attended, Bowdoin in Maine, before his conversations with Lomax, he said. "HBCUs have a tremendous record, yet are disadvantaged when it comes to giving," Quillin and Hastings said in a statement. "Generally, white capital flows to predominantly white institutions, perpetuating capital isolation."

With that in mind, Hastings has a request for his fellow successful entrepreneurs. "We all tend to give to the institutions that we know and love," he told CNBC. "If you're going to give a gift to your alma mater, go ahead and do that, but also give one to the HBCUs." A donation to the United Negro College Fund is a good place to start, since it functions as "the United Way of the system," he added. Donating to both, he said, "is a great way to go."

In addition to these options, the US News & World Report ranking of best colleges includes 80 HBCUs spread across many states. Perhaps one is in or near your own community.