The majority of blacks still lived in rural areas and had to attend segregated public schools, which were typically underfunded by the white Democrat-dominated state legislatures.
With an economy chiefly based on agriculture, the South was struggling to recover from losses during the American Civil War, and funds for public services were limited.
[4] Among the original trustees were Rutherford B Hayes, Morrison R Waite, William E Dodge, Phillips Brooks, Daniel Coit Gilman, Morris Ketchum Jesup and the donor's son, William A. Slater; and among members chosen later were Melville W Fuller, William E Dodge, Jr, Henry Codman Potter, Cleveland H Dodge and Seth Low.
Atticus Greene Haygood, Jabez Lamar Monroe Curry, Wallace Buttrick, and James H. Dillard were general agents of the fund.
The fund was of great value in aiding vocational schools in the South, its largest beneficiaries being the Hampton Normal and Agricultural Institute of Hampton, Virginia, the Tuskegee Normal and Industrial Institute of Tuskegee, Alabama, Spelman Seminary in Atlanta, Claflin University in Orangeburg, South Carolina, and Fisk University, in Nashville, Tennessee.