One of the most serious problems facing historically black institutions of higher education in America has been the lack of operating capital, as well as investment capital. Many historically black institutions have resorted to program cutbacks of all types or program deletion to offset capital shortages, while others not so fortunate have closed. The problem is compounded by the inability of students and parents to meet tuition costs, due to poor economic conditions and government's reduction in financial aid allocation;Seven historically black institutions in this study had to eliminate institutional programs due to financial difficulties;The purpose of this study was to review the historical investment practices of funds by historically black institutions in higher education from 1950 to 1980. Initially, two historically black institutions, one public and the other private, were selected for the study. After reviewing these findings, thirteen additional historically black institutions in North Carolina, South Carolina and Virginia were investigated to see if the initial findings of the study of the two selected historically black institutions would be strengthened. Data were collected from personnel presently at the institutions and from former employees by means of personal interviews and surveys;Current financial instability of the historically black institution attributed to declining enrollments, shortage of funds due to disproportinate monetary allocation by federal and state governments as well as other agencies and to investment restraints. Most historically black institutions do not have endowments, unrestricted grants nor alumni associations that could provide them the capital to engage in market investments;The absence of investment portfolios by the historically black institution places great limitations on its expansion of capital resources when allocated funds are restricted. In addition, the inability to provide financial assistance to some needy students when economic conditions are bad, prevents the institution from maintaining enrollments. Thus, a subsistence level of institutional operation exists;The fifteen institutions examined for this study experienced financial difficulties, along with limited resources for investment purposes. Six of the historically black institutions in this study entered the investment market on a limited basis.