The HBCU Fastball: Student Freedom Initiative Founder Robert F. Smith

Good afternoon everyone and welcome to another episode of HBCU Fastball sponsored by the Student Freedom Initiative. Student Freedom Initiative is a 501c non-profit organization based here in Washington D.C. where we like to focus on the wealth gap in America through the lens of education. Now we've had lots of opportunities to interview many of our HBCU leaders but today today is going to be very special. Today we have our chairman of the board of Student Freedom Initiative Robert F. Smith. Now you may already know him but just in case you don't, Robert F. Smith is a business leader, investor in transformative companies, a champion for diversity and inclusion, and a steward of the culture, the environment, equity, education, I could go on. But we know him best also as the present founder and CEO of the technology investment firm Vista Equity Partners. How do you know him? Well today we hope to get you get to know him better and importantly you get to know his vision and his founding of Student Freedom Initiative. Student, so so Robert thank you for joining us, thank you for joining the HBCU Fastball and thank you for all that you're doing for our community. In fact so happy to see you and so happy to see you and happy to be here. Thank you for welcoming me. You know Robert there's no better place to start than at what some people believe, we know it's not the true beginning, what some people believe to be the true beginning and that's the Morehouse gift of 2019. We hear about it all the time, whenever I'm out talking I hear yeah that's the guy, the Morehouse gift of 2019. But you know when we look back it's been four years, over four years now, a quick four years since your historic gift to those 400 men at Morehouse College. Ironically the country continues to debate and policies are being made on student loans. But my question to you Robert is was that investment a good investment on your behalf and and what was on your mind when you made that transformative gift that really broke up the world to this issue of HBCU student loans and the great challenge? Sure and again thanks for welcoming me and giving me a chance to talk to the parents and students at HBCUs and potential students at HBCUs. You know I think you know this Mark, you know as we have you know made our way through this country as African Americans you know there's been a number of structural and systemic challenges that have inhibited more broadly for us more broadly participating in you know the this national economic opportunity that is America. You know and I that goes to my mind every day in in essence and as I thought about you know delivering a gift to the class during the commencement speech you know leading up to that I thought you know what what are some of the challenges that that African American students face and I was at Morehouse a year before and talking to a number of students and really just trying to get a sense and there's all sorts of challenges but the one that stuck out in my mind frankly was the fact that African American students generally borrow more federal loans than their white counterparts. They end up graduating with more debt often well over seven thousand dollars more in debt and they typically hold about twice as much as their white counterparts and frankly you know often when I look at the salaries their salaries aren't as high and that is a burden and when you start thinking about being you know a student and often it's a you know first generation college student and it's been you know there's their colleges is being paid for by by student loans their parents and grandparents through the parent plus loan programs that can really inhibit their ability ultimately to to you know to start to create wealth and often their first generation in their family and and and they in order for them to become wealth generators they first need to pay off and service the student loan debt and then of course they have the opportunity to then invest in themselves in either their education invest in their their their economic opportunity which might be you know the financial markets or buying houses or starting businesses and as I thought about it I said what better way to really hopefully help these 400 students than deliberate what would be a you know decades-long burden you know there's students like Jarvis May who was a one of the co-valedictorians of the class he now because he was free to free of debt is now attends medical school at University of Pennsylvania uh and in talking to him he said I may not have made that choice if I was saddled with the student loan debt from from my undergraduate you know uh Elijah Dormius is also in that class is using uh this this this freedom uh to invest in stock market and in in the financial markets and also start a non-profit to help other students from low-income backgrounds so when you think about liberating these 400 eagles uh you know giving them a chance to now uh go and invest in themselves invest in their community and invest uh in creating more wealth uh in for their families and their community I think it was a great start uh that that I was able to fortunately be able to to enable. So thanks Robert you know it it strikes me that freedom is the key word here and although that was an investment in a class that's an investment in the nation because those two folks that you just that you just listed they're going to be great Americans they're going to be out here doing things that will impact the entire national economy and so I think that's key to what we're doing and I've run into so many of them that would thank you personally and their parents along the way so thank you on behalf of many of us you know along those same lines about a year after your historic donation to Morehouse the nation was appalled to watch the murder of George Floyd on national tv you'd already made your donation however many other companies stepped up at that time to promise cash or in-kind donation uh it's been some time since then and just from your perspective and and and what you may know in large uh about businesses and what they are doing how are we doing how is the nation doing on making good on some of those post George Floyd promises you know you know honestly uh overall not good um and you know I give you that summary in essence from some materials that have been published one by McKinsey. McKinsey had built an institute for black economic mobility and uh what they had done is now kind of kept track that who's made the pledges and what effect has it had uh on the communities and some of the world's largest companies dedicated uh somewhere between 60 and 80 billion dollars uh to fund causes to aid and enable um you know this this plight that african-americans are facing you know racial uh social injustice and economic injustice and while I saw a number of companies start to increase uh their their pledges uh often what we're finding is they they've not necessarily um you know fulfilled in those those those pledges so the pace of the monetary commitments uh has slowed year over year since since uh 2021 and you know these commitments often uh some of them were actually you know they characterized them as as things they've already done as opposed to new activities uh that needed to be done and so those are some of the challenges that I think we're we're facing and you know one of the things we formed is the the southern communities initiative which is designed to help these companies uh and and point to in this case there are six communities that if you do a you know 100 mile radius around each of those communities it gets to 50 percent of the african-american population and pointing them to specific uh institutions programs projects where that capital can flow and it has a very high certainty and likelihood of affecting the african-american community uh directly so that's one of the initiatives we formed and I formed that with uh out of some work we did with the business roundtable and we have the the bcg boston consulting group uh as well as paypal as partners and now kellogg foundation and others are partners in that initiative because we're really focused on how do you now go from the walk or from the talk to the walk and driving it specifically into the uh organizations foundations as well as um uh some of the the activities that are actually creating jobs like the vermeen foundation we just launched in atlanta which will create hundreds of of uh small african-american entrepreneurs through their program which is a fantastic program that just has never touched the african-american community so those are you know a couple of the ways that we're driving uh to to make sure that there's the nation and companies are making good on the on the post uh george floyd promises that that's great and what we see is there's a mechanism if if a company wants to to uh authentically be active in this space there's a mechanism for them to do that another another organization that you founded obviously one that I that I know well and I'm glad that you found it is the student freedom initiative uh now this all comes together I think in terms of your philanthropy your overall vision your understanding of the lived experiences of those students at at Morehouse and many others you launched it in 2021 with nine initial HBCUs in cohort one I happen to know that there are now over 53 schools and the mission statement starts with eliminating the wealth gap in America through the lens of education so for our audience and for students who are uh engineering majors and STEM majors at the schools and parents who are making decisions about this fall and next year about where their students may may go to school what was your your goal in starting the student freedom initiative sure you know one of the interesting things uh in with in that I learned quite frankly with this this Morehouse gift was the amount of student debt obviously that that our students faced and uh not surprisingly you know the breadth and scale of how much debt uh the these students had and you know when I think about you know the world I live in which is you know very STEM oriented technology oriented you know these are really you know typically very good jobs uh but often these students don't necessarily have access to them uh and often you see them not be able to finish college because they have so much debt uh by the second year or third year that they don't get into the what I'll call the the opportunity to really participate in the American uh digital economy and so the idea was well how do you create you know a systemic approach uh to this this massive amount of student loan debt that our students are facing so the idea was now how do you you know fix this uh in perpetuity so what we did is we set out to build in essence an endowment uh and the endowment in essence would be an alternative uh to student loans for juniors and seniors who are majoring in STEM uh at any of our partner organizations and again we've targeted about 101 of these these uh HBCUs and minority servicing institutions and the goal again was to raise 500 million dollars we've had over have over 30 percent of that funding today and we're still calling on corporations to help invest uh and the way that the math actually works is you know a 10 million dollar grant in this uh particular program basically liberates a hundred STEM students in perpetuity and I think about that's a massive investment uh uh return that you get from from a 10 million dollar grant uh for STEM students uh who will now participate in the overall growing of the American economy which is which is central to frankly us all prospering in this high you know hyper competitive world so uh that's what we've been doing and we've been partnering and through your your leadership and help uh creating the partnerships I think we now have over 53 uh of our of the schools of our target now are now part of the platform and what you can do if you think about it is you know you borrow this capital uh rather than take on some of the parent plus loans etc which are you know high priced and in in high rates uh and when as you you know matriculate in a career uh in STEM uh you actually pay it back into the fund and then the fund actually relents the money as opposed to paying it for instance to the to the government or a bank or an institution of that type so that creates a generative uh and regenerating uh opportunity but what it also does uh is if you are now going to go provide certain types of services um that would be in your community as a teacher and you do that for a period of time 20 years or whatever it might be that actually satisfies uh the the loan as well um the other elements that we put in place is well we've had some partners now who've helped us with some uh IT infrastructure upgrades uh now over 100 million dollars where we're actually bringing broadband infrastructure and IT upgrades uh to these HBCUs so that they now can remain eligible for Title IV funding on the one hand and also uh ensure that they have capacity uh and access using broadband access to what would be you know cloud-based services that will enable them to be more effective uh in their jobs and a couple other things is of course um uh provide access to our InternXL platform we have over 20,000 students now on the platform uh and partnered with over 200 corporations so these are for their summer jobs and and uh you know one of the other partners Prudential provided cash uh about 10 million dollars to provide some financial literacy education uh for the students and first generation parents so again all in the rubric of let's educate uh uh inform provide access and what we think is a more elegant solution to the current student loan crisis that our students face that's that's amazing and I happen to know that there is a need there is a demand you're exactly right 63 percent of our students on HBCU campuses are using parent plus loans those loans default at five times the rate of others and the debt is held twice as long so now that there is an option for all of our students out there especially those who have shown skin in the game and potential uh for being contributors in the future these STEM majors that have already made it to junior and senior level so thanks a lot I think you see a problem you move out on it we're getting a pattern here you see a problem you move out on it there was another one that I wouldn't mind you sharing a little bit with our audience and there's this issue of a digital divide in the country uh recently you had us pivot and I've been around the country for the last two months as a matter of fact talking about and learning and and taking action on this issue of a digital divide can you share with us why are you focusing on the digital divide in America and how does this elevate HBCUs? Sure I think you know the the world that I spend most of my time in is investing uh in enterprise software business software and what you come to realize uh is it is a a more globally connected uh world than you know when you and I were in college and you know it was tough I know in college in our time to gain access to computing time and computing resources and what we have today of course are cloud services and computing capacity that is almost I'll call it available all the time but what we found is that you know the vast majority of the HBCUs which you know about 82% of them are actually in broadband deserts in other words they don't have access to reliable broadband um uh and as a result of that uh it inhibits their ability to actually participate as students participate as entrepreneurs and participate uh in what is the next generation of opportunity globally economic opportunity which is digital uh opportunity and so as we discovered this of course uh you know we said well how can we help you know we're already building the relationships with the HBCUs for the student freedom initiative uh and our funding mechanisms for the loan programs we said well we also have unique capabilities and relationships with with broadband providers and infrastructure providers and uh why don't we pivot and help enable these HBCUs to gain access uh first of all to the infrastructure bill funding that has already been created so that they can now tap into that and provide uh what I'll call you know the highest quality um uh you know broadband services for the community not just the HBCU but for the community and so that's what we've been doing and I think that plan uh you know now is is in full effect I think we've made some tremendous progress there's a lot more to be done uh but it's critically important that uh we build out these community plans so that these communities in which the HBCUs are the hub of have the ability now uh to go and apply for the infrastructure bill funding and get billed out so that they now can participate uh in in what is again this the greatest uh economic opportunity which is digital uh for the next uh next few generations if we miss out on this I'm challenged uh by how we're going to catch up you know one of the things that we can talk about is what we've done uh with our pilot project in in Orangeburg, South Carolina you know the project is first and foremost an effort uh to solve this this broadband affordability program and it's home to two HBCUs so you know you have Claflin you've got South Carolina State and what that project now demonstrates is what can be done by applying really I call it our unique utility uh and frameworks to solve these affordability gaps and also to to give the that community a plan that they can now go apply uh and expand and get 5G access uh on a completed plan so that will create uh access not only for those two universities but the entire uh surrounding community which are the small to medium businesses uh that support that that community of constituents so that just gives you an idea of well you know one of the the plans that we put in place and projects we put in place we're now replicating across uh the the entire landscape of the HBCUs that are in our focus. That's that's great Robert and I can tell you as a matter of update I've spent some time in Selma and Birmingham and Tuscaloosa and Macon County down in Tuskegee and they are super excited about the opportunity to work with someone they trust which is their university uh in helping them get access to this once-in-a-lifetime funding and we've heard about part of that Mark again remember this our Southern Communities Initiative the overlay and I think again you know with you and our group workers of Southern Communities Initiative I mean we've got New Orleans, Birmingham, Charlotte, Houston, Memphis, Atlanta each of those communities we now I think have critical mass uh with the HBCUs with your team with our partner organizations to now drive forward a very effective plan to digitize and enable each of those communities to gain access to these you know 100 billion dollar infrastructure bill uh so that they can now participate at all of small to medium business universities the college students you know STEM students uh in in the next generation of opportunity so I think it's great the work that you and your team are doing and you know hopefully we can continue to call on more support from the corporations in those in those communities and the communities themselves to call upon their politicians to ensure that they are gaining access to the funding. Absolutely and you are doing great work and leadership in this space but but I heard you loud and clear you are just one man and there there are others out there uh both in industry both in the federal government in the world that can join and join this movement and I'll call it a movement where we're going to make a transformational difference in the lives of everyday Americans. Robert I know that you are a busy guy but if I could ask you just one more question that I've gotten sometimes in one form or the other as I traveled around and everyone knew your association with our organization lots of folks are out there young folks that are coming up and others who are starting as entrepreneurs and they all look to you and say okay uh who's the next Robert Smith or how do I become the next Robert Smith or what's my next step so here's what I would ask you uh in closing as long as as well as any closing comments you would like to have what advice would you give a young Robert or Roberta Smith attending or considering attending college today or just out there looking at entrepreneurial opportunities? Sure and I will give the same advice that I give my own children uh it is focus on two things right now uh the first is building skills and the second is developing habits um you know the skill development is critical understand you know where opportunity sets are in the marketplace and what skills are going to be required uh for you to participate fully in that economic opportunity um and you know these are skills for you know from critical thinking analytical skills uh and or the ability to solve problems uh and make sure that they are valuable uh that to to the communities that you want to serve and and frankly to the to the markets that you want to participate in and developing habits good habits you know that the habits of of fulfilling commitments the habits of of of outlining exactly what you're going to accomplish and putting plans in place to accomplish it um all those sorts of components I call it you know getting up early uh and staying healthy and eating healthy all those things skills and habits and you can put those two together I'll call it while you're in college in your 20s and as you hit your your late 20s and early 30s you can now deploy those into uh different marketplaces that then can be very productive for you your family and again to be able to serve your community in that regard but if you haven't built out valuable skills or or uh what I'll call reliable habits uh you're going to be challenged as you get into your 30s and 40s that to actually create economic opportunity for yourself uh and for for those around you outstanding so Robin thank you very much for taking time with us thank you for your vision and student freedom initiative as well as SCI and everything else that you're doing for our community for everyone out there studentfreedominitiative.org join us go out to our website go out to our landing page learn more or reach out to us if we can provide you more information on how you can be a part of all that you've heard today and all that we're doing Robert thanks again and thanks everyone thanks to everyone who has made the decision to tune in we'll talk soon all right all the best thank you again