Perspectives

from the Lincoln University School of Business

Issue 8: April 17, 2024

Welcome to the LU School of Business’s Perspectives newsletter, bringing you contemporary and evidence-based business perspectives from our faculty.

The Economic Impact of Lincoln University: The Case for Bridging the Inequality in the 1862 and 1890 Land-Grant State Matching Funds

Because of the changing financial climate facing public higher education coupled with inflation and high maintenance costs, university administrators seek significant economic justifications for their budget requests from state legislatures. While the economic justification for the budgetary request is important and will be explained shortly, the United States Department of Education in a 2023 press release noted that state-owned Historically Black Colleges and Universities (HBCUs) are funded less to the tune of $12 billion over several decades when compared to their non-HBCU counterparts. Specifically, on the 18th of September 2023, the United States Departments of Education and Agriculture sent out letters to 16 state governors urging the state chief executives to equitably fund land-grant HBCUs.

Lincoln University is owed $316 million of the $12 billion matching grant from the state of Missouri in the last 30 years. As business professors, we look at this issue beyond the need for equity (which we agree is highly desirable) but through the lens of economics and business competitiveness as well.

Using the economics and business competitiveness lens, Lincoln University business professor Dr. Manzoor Chowdhury conducted an economic impact study to highlight the impact of Lincoln University on its surrounding communities. Using the IMPLAN (Impact Analysis for Planning) economic model, the study investigated three broad categories of impacts – direct effects, indirect effects and induced effects.

The major finding of the study was that Lincoln University generates $170 million in economic benefit to mid-Missouri and creates and maintains more than 1,300 jobs. Adding other benefits (both tangible and intangible) increases the total economic impact to over $200 million per year. This study was conducted pre-COVID-19 when the Missouri economy was at $303 billion. Using the pre-COVID-19 Missouri economic GDP, the economic impact of Lincoln University on Missouri's GDP is significant. This is even more significant especially when we consider that Lincoln University is just one out of 27 public institutions of higher learning in the state of Missouri.

Now, back to the issue of equitable funding of land grant institutions of higher learning and why this is not just about equity but is also about economics and business competitiveness as well. The impact of Lincoln University's agricultural research and extension services is already being felt across the state, and especially in central Missouri, where our research and extension services are helping Missouri farmers to grow better and more profitable agricultural products.

We can also see from the snapshot of the Lincoln University economic impact study that equitable funding of the university would have a bigger impact on Missouri's economy. Based on the pre-COVID-19 economic impact of $200 million even with less funding, we can reasonably forecast, by using the Impact Analysis for Planning economic model, that a $400 million economic impact on the state of Missouri is possible if Lincoln is equitably funded under its land-grant status.

We recognize that this problem predates the current Missouri General Assembly, but we believe they can do something about it.

Dr. Manzoor Chowdhury and Dr. Abdul Ajia, both from the Lincoln University School of Business, contributed to this article.

Disclaimer

The views expressed in this newsletter are solely those of the authors and do not represent nor reflect the views of the School of Business or that of the University.

Lincoln University of Missouri, a historically Black, 1890 land-grant, public, comprehensive institution, provides a diverse population access to excellent educational opportunities through teaching, research, and extension services within a nurturing, student-centered environment.