Currently, there are five Black billionaires from the United States. All amassed their wealth in a self-made stride, and are known for their generosity. But, do they have a duty to donate to causes like wiping out African-American student debt? How much is enough?

How Robert F. Smith Quietly Became the Richest Black Person in America

While our eyes were glued on Oprah, Robert F. Smith quietly started a business and in just 20 years grew his wealth to billionaire status.  

Before billionaire Robert F. Smith stunned the crowd at Morehouse College’s commencement ceremony in May, few people knew who he was. The billionaire tech executive and philanthropist has stayed under the radar much of his career, even in Austin, TX, where he lives and works. He rarely grants interviews and is so low-profile that when the Smithsonian’s National Museum of African American History and Culture put a call out for major donors in 2013, the museum’s directors reportedly wondered, “Who is this Robert F. Smith?” Based on the size of his donation to the museum and his recent donation to the Morehouse class, a lot more people know his name, however there’s a lot more to know about Smith.

Smith grew up in a mostly Black middle-class neighborhood in Denver, CO, in a middle-class family. Both of his parents were PhDs in education, and he was apparently ambitious at an early age. He applied for an internship at Bell Labs in high school, but was told he was too young. Mr. Smith called every Monday for five months and finally got the position.

He attended Cornell, where he studied chemical engineering, then took a job at Kraft General Foods. He earned an MBA from Columbia, and from 1994-2000 worked for Goldman Sachs in its technology investing sector, where he oversaw $50 billion worth of merger deals and acquisitions for companies such as Apple, Microsoft, Texas Instruments, eBay and Yahoo.

MILLIONS TO BILLIONS

In 2000, Smith founded Vista Equity Partners, a private equity and venture capital firm focused on buying and selling technology and software companies.

By the age of 35, Smith had already made his first million, and before he was 55, he became a billionaire, according to a profile by The Washington Post.

According to Forbes, Vista Equity is one of the best-performing private equity firms, with $46 billion in capital committed to companies specializing in data.

In 2019, Smith, who has a net worth of $5 billion, was #355 on the Forbes Billionaires List. He is the richest Black person in the United States, topping Oprah and the Carters.

PHILANTHROPY

Before the Morehouse commencement, Smith donated $1.5 million to Morehouse College for scholarships and the development of a new park.

In 2016, he pledged $50 million to Cornell University to support its chemical and biomolecular engineering school, as well as scholarships for Black and female engineering students.

As one of the founding donors of the National Museum of African American History and Culture, he committed $20 million (behind Oprah Winfrey’s $21 million pledge) to the museum before it opened. Smith’s donation to the museum was earmarked to digitize photographs, videos and music — and help foster an interactive experience for a 21st-century museum. The gift also allows the museum to act as a hub to archive photographs from other institutions, such as museums, funeral homes and personal collections.

In 2017, he became the first and only Black person to sign the Giving Pledge, an initiative created by billionaires Warren Buffett and Bill and Melinda Gates. The Giving Pledge challenges the wealthiest people in the country to give away at least half of their money to charity.

“I will never forget that my path was paved by my parents, grandparents, and generations of African Americans whose names I will never know,” Smith wrote in an essay for the Giving Pledge. “Their struggles, their courage, and their progress allowed me to strive and achieve. My story would only be possible in America, and it is incumbent on all of us to pay this inheritance forward.”

“We wanted it to be a living, interactive museum where we tell our own stories of ourselves our way,” Smith said at the time.

Smith is also the founder and president of the Fund II Foundation, which provides grants for causes such as human rights, the environment, music education and “preserving the African American experience.”

PERSONAL LIFE

In 2015, Smith married model and former Playboy Playmate of the Year Hope Dworaczyk on Italy’s Amalfi Coast. Artists John Legend, Seal and Brian McKnight performed during the extravagant ceremony. Dworaczyk and Smith have two children together, while Smith has three other children from a previous marriage. He named two of his sons Hendrix and Legend, after Jimi Hendrix and John Legend.

Smith has a passion for music and a flamboyant side as well. In 2016, he was named chairman of the board of Carnegie Hall, the nation’s most prestigious concert stage. He bought and restored a storied resort, Lincoln Hills, outside Denver, where Black jazz musicians like Duke Ellington once played. And he has founded programs to support music education and minority entrepreneurship in Austin, where he lives, and Chicago, where Vista has an office.

Counting Black Billionaires and Their Philanthropy

Currently there are five Black billionaires from the United States; they’re listed in order of their wealth: Robert Smith, David Steward I, Oprah Winfrey, Michael Jordan, and newcomer Jay-Z.

All amassed their wealth in a self-made stride, and are known for their generosity. Like many other celebrities, these wealthy individuals have sought to propel higher education by creating scholarships and funding for colleges.

David Steward, the second-wealthiest Black man in America, pledged $1.3 million over four years to the University of Missouri-St. Louis in 2018 to establish the David and Thelma Steward Institute for Jazz Studies. Stewards’ net worth is valued at $3 billion; he is the founder of World Wide Trade, an I.T. provider and remains the majority owner. His son, David Steward II, has just launched the very first Black-owned animation studio in the U.S. Steward II’s company, Polarity, will create animation for TV and feature film content.

Oprah Winfrey, the most generous among the billionaires, has donated over $425 million throughout her career. Included in that sum, she spent $100 million to build the Oprah Winfrey Leadership Academy for Girls in South Africa. Her net worth is valued at $2.6 billion. Winfrey was able to transition her memorable talk show of 25 years, into a business and media giant. The OWN network is home to some of the biggest shows out – Greenleaf and Queen Sugar are among the line-up.

Michael Jordan’s net worth is $1.9 billion. He bought the majority stake of the Charlotte Hornets (90%) for $175 million, and they are now worth $1.05 billion. Jordan has a long list of philanthropically inclined ventures. He has served as Make-A-Wish’s Chief Wish Ambassador since 2008, and has donated and brought in more than $5 million to the organization; he’s granted hundreds of wishes in his 30 years of working with Make-A-Wish.

Jay-Z is the newest member of the billionaire club, but he is no stranger to gifting graduates. He and his wife Beyoncé donated $1 million in scholarships while touring together in 2018. Eleven students from 11 cities were chosen with the help of The Boys and Girls Club of America in each city to be able to attend college.

Can the Black Wealthy Pay Off Black Student Debt?

Are we enough to take care of our own community, as Robert F. Smith suggests?

Imagine attending an HBCU: you receive some of the greatest education anywhere and when you finally walk across the stage – one of your own wipes your debt clean. This year’s graduating class of Morehouse College received that treatment after Robert F. Smith gave the commencement address.

Smith, a billionaire software investment specialist gifted the college $40 million to pay off roughly 400 graduates’ student debt. During his speech, he urged others to do the same.

“Let’s make sure every class has the same opportunity going forward, because we are enough to take care of our own community,” Smith declared in his commencement speech.

A nice thought, but is there enough Black private wealth in the U.S. to eliminate Black student debt?

Black Student Loan Debt

As a nation, we should be very concerned that African Americans carry a disproportionate amount of higher-education debt. Statistics taken from 2016 data show an estimated 86.8% of Black students borrow federal student loans to attend a four-year public college, according to the National Center for Education Statistics, 59.9% of White students borrow to complete their education.

This year student loan debt in America has reached an all-time high, making it the second-highest consumer debt category behind mortgaging. Over 44 million borrowers owe roughly $1.5 trillion in student loan debt.

In 2016, there were 194,500 Black college graduates who received a bachelor’s degree. The average student borrows somewhere around $35,600 to complete a bachelor’s program. If we take the number of graduates and multiply it by that average cost, we can estimate that the Black student loan debt in America has reached $6.9 billion.

Can Black Philanthropy Eliminate Black Student Loan Debt?

According to Mako Fitts Ward, a writer for theconversation.com, the percentage of Black households that hold more than $1 million in assets has remained at or below 2% since 1992, or about 877,000 based on 2018 population estimates.

Of course, looking at a basic level – a single graduating class, the collective wealth among America’s Black billionaires – which totals $13.5 billion – can easily subsidize the debt.

Certainly, a more sophisticated calculation is needed, but a rough estimate shows that if each of America’s Black millionaire households devoted $8,000 to the cause of eliminating the $6.9 billion in debt of 2019 Black graduates, their debt could be wiped out.

But alas, here comes the class of 2020 just around the corner. Would they, and could we, even expect Black millionaires to “pony up” for the community of Black graduates every year?